1997

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[x]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the fiscal year ended December 31, 1997.
[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from _______ to _______.

                        Commission File Number 001-04710
                               WHITMAN CORPORATION
             (Exact name of registrant as specified in its charter)

            Delaware                                   36-6076573
------------------------------------     ---------------------------------------
  (State or other jurisdiction of        (I.R.S. Employer Identification Number)
   incorporation or organization)

3501 Algonquin Road, Rolling Meadows, Illinois                 60008
----------------------------------------------              ----------
   (Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code(847) 818-5000
          Securities registered pursuant to Section 12(b) of the Act:
                                                                            
     Title of each class              Name of each exchange on which registered
-------------------------------      -------------------------------------------
Common Stock, without par value                New York Stock Exchange
                                                Chicago Stock Exchange
                                                Pacific Stock Exchange
Preferred Share Purchase Rights                New York Stock Exchange
                                                Chicago Stock Exchange
                                                Pacific Stock Exchange

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months and (2) has been  subject to such  filing
requirements for the past 90 days. Yes [x] No [ ]
     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
     As of February 27, 1998,  the  aggregate  market value of the  registrant's
common stock held by non-affiliates  was $1,792.3 million.  The number of shares
of common stock outstanding at that date was 100,621,718 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                                           Part        Item
                                                          ------    ----------
1.   Whitman Corporation definitive proxy statement 
     dated March 20, 1998 for the 1998 Annual Meeting 
     of Shareholders.                                      III      10, 11, 12

                                     PART I

Item 1. BUSINESS.
GENERAL

     Whitman  Corporation  ("Whitman"  or the  "Company")  through its principal
operating company,  Pepsi-Cola General Bottlers,  Inc. ("General Bottlers"),  is
engaged in the production and  distribution  of Pepsi-Cola  brand products and a
variety  of other  non-alcoholic  beverage  products.  General  Bottlers  is the
world's largest independent franchised Pepsi-Cola bottler,  accounting for about
12 percent of all  Pepsi-Cola  products sold in the U.S. It serves a significant
portion of a twelve state region, primarily in the Midwest, with a customer base
of  approximately 25 million people.  In the last three years,  General Bottlers
has more than  doubled  its  potential  market by  signing  exclusive  franchise
agreements with PepsiCo,  Inc.  ("PepsiCo") for the northern and western half of
Poland  during  1994,  for  the  northwest  portion  of  Russia,  including  St.
Petersburg,  at the end of 1996, and for Belarus and the Baltic states (Estonia,
Latvia and Lithuania) in 1997. In 1987,  Whitman  entered into an agreement with
PepsiCo whereby PepsiCo contributed cash and assets in exchange for a 20 percent
interest in General  Bottlers.  While General Bottlers manages all phases of its
operations,  including  pricing of its  products,  General  Bottlers and PepsiCo
exchange  production,  marketing and distribution  information,  benefiting both
companies'  respective efforts to lower costs, improve productivity and increase
product sales. The Company was previously  engaged in the refrigeration  systems
and  equipment   business   conducted  through  Hussmann   International,   Inc.
("Hussmann")  and  in the  automotive  services  business  through  Midas,  Inc.
("Midas").  On January 30, 1998, the Company  distributed to shareholders all of
the common stock of Hussmann and Midas in tax-free spin-offs.

Forward-Looking Statements

     This annual report on Form 10-K contains forward-looking  information which
reflects management's expectations,  estimates and assumptions, which were based
on  information  available  at the time  this  Form  10-K was  prepared.  Future
results,  performance or achievements of the Company may vary significantly from
such information and are subject to future events and uncertainties,  including,
among other factors, weather, economic and market conditions,  currency exchange
rates,  cost and  availability  of raw materials and  competitive  activities or
other business conditions.

Marketing and Distribution

     General Bottlers'  business is seasonal and subject to weather  conditions,
which have a significant impact on sales. In the United States, General Bottlers
sells its  products  across a  significant  portion  of a twelve  state  region,
including:  Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Ohio,
Tennessee,  Virginia,  West  Virginia and  Wisconsin.  As part of its  long-term
strategy,  General Bottlers will look to acquire additional domestic franchises,
principally in the Midwest.
     In 1997,  approximately 87 percent of General Bottlers' domestic volume was
from Pepsi-Cola  brand products,  including:  Pepsi,  Diet Pepsi,  Caffeine Free
Pepsi,  Caffeine  Free Diet Pepsi,  Wild Cherry  Pepsi,  Diet Wild Cherry Pepsi,
Mountain Dew, Diet Mountain Dew, Caffeine Free Mountain Dew, Slice products, Mug
Root Beer, Mug Cream Soda,  All-Sport and Aquafina still water. General Bottlers
also  distributes  other brands,  including:  Dr Pepper,  7-Up,  Sunny  Delight,
Hawaiian  Punch,  Seagram's  mixers,  Ocean Spray,  Lipton Tea,  Frappuccino and
Avalon spring water, which account for the remaining 13 percent of volume.
     In  each  market,   General  Bottlers  sells  approximately  320  different
brand/package  combinations  through its three major channels:  take-home,  cold
drink and fountain. The take-home segment includes  supermarkets/grocery stores,
convenience stores, gas stations, mass merchandisers,  membership clubs and drug
stores. The  supermarkets/grocery  stores channel, where General Bottlers is the
market  share  leader in its  territories,  accounts for more than 45 percent of
total domestic volume, but is also the most price competitive  channel. The cold
drink segment includes  vending  machines and coolers.  The full service vending
machines  have the  highest  margin  of any  distribution  channel,  because  it
eliminates  the middleman and enables  General  Bottlers to establish the retail
price. General Bottlers owns a majority of the vending machines used to dispense
its  products  and will  continue  to invest  extensively  in vending  machines,
specifically  those  dispensing  20 ounce  non-returnable  ("NR")  bottles.  The
fountain  segment includes  fast-food  accounts and other  restaurants,  hotels,
hospitals, movie theaters and other commercial accounts. With PepsiCo's spin-off
of its  restaurant  businesses,  General  Bottlers  has been  pursuing  and will
continue to aggressively pursue fountain opportunities.
     Volume growth has  historically  come from the supermarkets  sector,  where
competition  is  intense.  General  Bottlers  has  recently  begun  to  focus on
obtaining  more of its growth from higher margin  channels,  such as convenience
stores, gas stations, vending machines and food service providers.
     The majority of General  Bottlers'  products are distributed by route sales
people to retail  outlets by truck.  General  Bottlers  operates more than 1,300
routes in its 11 domestic sales divisions,  112 routes in Poland,  and 37 routes
in Russia and the  Baltics.  General  Bottlers  fleet  includes  more than 3,000
vehicles,  the majority of which are owned. For several years,  General Bottlers
has been  expanding its bulk  distribution  system,  Pepsi  Express,  for larger
customers  in an effort to improve  productivity.  In Poland,  General  Bottlers
continues to improve the  efficiency of its delivery  system by reducing  routes
(from  160 in  1996  down  to the  current  112)  and  implementing  a  pre-sell
distribution system.
     General Bottlers  pioneered the use of hand-held  computers for route sales
people and this system enables General Bottlers to process sales and orders more
efficiently,  allows for better  inventory  and discount  controls,  and enables
sales personnel to handle a wider range of products more efficiently.

New Products

     During 1997,  General  Bottlers  continued  to expand its product  lines by
adding Sunny  Delight from Proctor and Gamble and  Frappuccino  from  Starbucks.
Both products were very successful  during their first year of introduction  and
will be rolled out in all divisions  during 1998. In addition,  General Bottlers
added Aquafina,  a new Pepsi brand still water product,  to compliment its other
bottled water product lines currently being distributed.
      As part of its  long-term  strategic  goal to transform  itself to a total
beverage  company and grow  faster  than the  industry,  General  Bottlers  will
continue  to  look  for  products  in the  non-carbonated  alternative  beverage
category to compliment its existing product offerings.

International Expansion

     In May, 1994,  General Bottlers  established a joint venture with PepsiCo's
existing manufacturing  operations and entered into a franchise agreement giving
it the  exclusive  right to  distribute  products  in the  northern  and western
regions of Poland. These distribution rights cover 40 percent of the population,
a market of approximately 16 million people.
     On December  31,  1996,  General  Bottlers  acquired  the assets of the St.
Petersburg,  Russia  franchise from PepsiCo,  which permits General  Bottlers to
produce and distribute  Pepsi-Cola brand products in St. Petersburg,  as well as
the surrounding area in the northwest region of Russia,  including  Kaliningrad.
In 1997,  General  Bottlers also acquired  franchise  rights for Belarus and the
Baltic  countries of Estonia,  Latvia and Lithuania.  Distribution in the Baltic
countries began during the first quarter of 1997.  These combined markets have a
total population of approximately 30 million.
     By the end of  1997,  General  Bottlers  had  invested  approximately  $145
million in Eastern  Europe,  including  Russia and the Baltics.  Investments  in
these  franchise  territories  during the next three  years are  expected  to be
approximately $75 million.
     The  Company  has  experienced  operating  losses in Poland each year since
beginning  operations in 1994. In 1997,  General  Bottlers reduced its losses in
Poland by one-third  from $12 million to $8 million as it cut costs,  introduced
new products and changed its distribution  system to a pre-sell system.  General
Bottlers expects to have additional  operating losses during the next two years,
but at levels  below those  incurred in 1997.  Despite  continued  expansion  in
Russia and the Baltics, it is expected total international operating losses will
be slightly  lower in 1998,  compared  with  operating  losses of $15 million in
1997.  General  Bottlers  expects  to  reach  break-even  in  its  international
operations by as early as the year 2000.  General  Bottlers  expects to find its
best opportunity for long-term growth in these markets. The current industry per
capita  consumption  in Russia and the Baltics is estimated to be  approximately
100 8-ounce  equivalents  per year  compared with  approximately  400 in Western
Europe and about 800 in the United States.

Bottling Contracts

     General Bottlers conducts its business primarily under bottling  agreements
with PepsiCo. These contracts give General Bottlers exclusive rights to produce,
market and distribute  Pepsi-Cola  products in authorized  containers and to use
the related  trade names and  trademarks  in the  specified  territories.  These
franchises  require  General  Bottlers,  among other  things,  to  purchase  its
concentrate  requirements solely from PepsiCo, at prices established by PepsiCo,
and to promote diligently the sale and distribution of Pepsi brand products.
     Pepsi  franchise  agreements in the United States are issued in perpetuity,
subject to  termination  only upon failure to comply with their  terms.  General
Bottlers has similar  arrangements with other companies whose brands it produces
and distributes.
     Pepsi franchise  agreements outside the United States are for fifteen years
in duration.  General  Bottlers  expects these agreements to be renewed prior to
their termination.

Advertising

     General  Bottlers  benefits  greatly from  national  advertising  campaigns
conducted by PepsiCo and the other beverage  companies  whose products it sells.
General Bottlers also makes  substantial  advertising  expenditures in its local
markets, including the use of television,  radio, print and billboards.  General
Bottlers  also  makes  extensive  use  of  in-store  point-of-sale  displays  to
reinforce the national and local advertising and to stimulate impulse purchases.

Raw Materials

     Excluding the water products,  virtually all of General Bottlers'  products
use  concentrates,  which  are  supplied  by the  franchisors.  In  addition  to
concentrates,  General Bottlers  purchases  sweeteners (e.g.,  fructose),  cans,
plastic  bottles,  closures,  carbon  dioxide  and  other  packaging  materials,
including  cardboard,  for use in the production and packaging of Pepsi-Cola and
other  non-alcoholic  beverages.  All  raw  materials  and  supplies,  excluding
concentrates,  are purchased from multiple  suppliers.  The packaging  materials
(bottles,  cans, caps, closures,  cartons and cases) are obtained from suppliers
approved  by the  franchisors.  General  Bottlers  obtains  water for use in the
domestic production process from publicly available sources.
     General  Bottlers  negotiates  contracts  for its  sweetener  and packaging
material   requirements  to  minimize  fluctuations  in  costs  and  ensure  the
availability  of those  materials  and  supplies.  The Company has entered  into
contracts,  which include a significant portion of its expected  requirements in
1998, for cans, plastic bottles and cardboard. During the first quarter of 1998,
the Company was still in negotiations,  which would cover  substantially  all of
its 1998 fructose  requirements.  A final agreement is expected during the first
or second quarter of 1998.
     In 1997,  General  Bottlers  experienced  lower  costs for  aluminum  cans,
plastic bottles and sweeteners, but it is expected that such costs will increase
during 1998.
     The  inability of suppliers to deliver  concentrates  or other  products to
General  Bottlers could  adversely  affect  operating  results.  None of the raw
materials or supplies  currently in use are in short  supply,  although  factors
outside of the control of General  Bottlers  could  adversely  impact the future
availability of these supplies.

Competition

     Americans  consume  more soft  drinks  than any other  beverage,  including
water.  Competition  among soft drinks of all kinds is intense,  particularly in
the principal cola drink market which accounts for  approximately  60 percent of
the total soft drink market.  The  carbonated  soft drink market is dominated by
Pepsi-Cola  and Coca-Cola  with a combined  estimated  market share of nearly 75
percent in 1997. Other major  participants  include Dr Pepper,  7-Up, Canada Dry
and Royal Crown Cola.
     The non-alcoholic beverage business is also extremely competitive.  General
Bottlers  competes  with many  forms of  commercial  beverages  in  addition  to
carbonated soft drinks, such as coffee, coffee drinks, tea, tea drinks,  juices,
juice drinks,  milk,  milk drinks and bottled water.  The principal  competitive
factors in the carbonated soft drink industry are price,  brand  recognition and
brand image. In the carbonated soft drink category the principal  competition is
Coca-Cola brand products.

Employees

     Whitman's  continuing  operations  employed  6,381  people  worldwide as of
December  31,  1997.  This  included  5,340  people  employed  in  the  domestic
operations and 1,041 people employed in the foreign operations. The Company is a
party  to  collective   bargaining   agreements  covering   approximately  2,800
employees.   Ten  agreements  covering   approximately  800  employees  will  be
renegotiated  in 1998.  Whitman  regards its  employee  relations  as  generally
satisfactory.

Government Regulations

     General Bottlers' domestic  production and marketing,  including  container
labeling, are subject to the rules and regulations of the United States Food and
Drug  Administration and other federal,  state and local governmental  agencies.
State rules and regulations include beverage container deposit laws in Michigan,
Iowa and the city of Columbia,  Missouri.  While the Company  actively  supports
environmental and anti-litter  programs, it also attempts to mitigate any impact
resulting  from the enactment of rules and  regulations  regarding  deposits and
restrictive  packaging which could adversely affect the operating results of the
Company.  Such rules and  regulations,  if enacted,  could adversely  affect the
operations of the Company.

Environmental Matters

     Whitman  maintains  a  continuous  program to  facilitate  compliance  with
federal,  state and local laws and  regulations  relating  to the  discharge  or
emission  of  materials  into,  and other laws and  regulations  relating to the
protection of, the environment. The capital costs of such compliance,  including
the costs of the  modification  of existing  plants and the  installation of new
manufacturing  processes  incorporating  pollution control  technology,  are not
material.
     Under the agreement  pursuant to which Whitman sold Pneumo Abex Corporation
in 1988 and a subsequent  settlement  agreement entered into with Pneumo Abex in
September,  1991,  Whitman has assumed  indemnification  obligations for certain
environmental  liabilities  of Pneumo  Abex,  net of any  insurance  recoveries.
Pneumo  Abex has been and is  subject  to a number of  federal,  state and local
environmental cleanup proceedings, including proceedings under the Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980  ("CERCLA") at
off-site locations involving other major corporations which have also been named
as potentially  responsible  parties ("PRPs").  Pneumo Abex also has been and is
subject to private  claims and several  lawsuits for  remediation  of properties
currently or previously owned by Pneumo Abex, and Whitman is subject to two such
suits.
     There is significant uncertainty in assessing the total cost of remediating
a given site and in determining any individual  party's share in that cost. This
is due to the fact that the Pneumo Abex  liabilities are at different  stages in
terms of their ultimate  resolution,  and any assessment and  determination  are
inherently  speculative  during  the early  stages,  depending  upon a number of
variables  beyond the  control of any party.  Additionally,  the  settlement  of
governmental  proceedings or private claims for remediation  invariably involves
negotiations  within  broad cost  ranges of possible  remediation  alternatives.
Furthermore,  there are significant  timing  considerations in that a portion of
the expense involved and any resulting obligation of Whitman to indemnify Pneumo
Abex may not be incurred for a number of years.
     In 1992, the United States Environmental Protection Agency ("EPA") issued a
Record of Decision  ("ROD")  under the  provisions  of CERCLA  setting forth the
scope of  expected  remedial  action at a Pneumo Abex  facility  in  Portsmouth,
Virginia.  The EPA has estimated that the cost of the remedial action  necessary
to comply  with an  Amended  ROD,  issued in 1994,  will total $31  million.  In
January,  1996,  Pneumo Abex executed a Consent  Decree with the EPA agreeing to
implement  remediation of areas associated with the former  Portsmouth  facility
operations.  Whitman management is optimistic that the cost of implementation of
the remedy  required by the Consent  Decree will be less than the estimated cost
set forth in the Amended ROD.  Additionally,  in a lawsuit brought against other
PRPs that did not  execute  the Consent  Decree,  Pneumo  Abex and Whitman  have
recovered  approximately  $3.1  million  in  settlements  and  have  obtained  a
judgment,  currently being appealed,  against other financially  viable PRPs for
more than 40  percent of the past and future  response  costs at the  Portsmouth
site.
     Management  believes  that  potential  insurance  recoveries  may  defray a
portion  of  the  expenses   involved  in  meeting  Pneumo  Abex   environmental
liabilities.   In  November,  1992,  Jensen-Kelly  Corporation,  a  Pneumo  Abex
subsidiary,  Pneumo Abex and certain  other of its  affiliates,  and Whitman and
certain of its affiliates,  filed a lawsuit against numerous insurance companies
in the Superior Court of California,  Los Angeles  County,  seeking  damages and
declaratory  relief for insurance  coverage and defense costs for  environmental
claims.  In 1997,  Whitman and Pneumo Abex  achieved  settlements  with  several
carriers, and although optimistic it will receive additional recoveries, Whitman
is otherwise unable to predict the outcome of this litigation.
     In the opinion of management,  the eventual  resolution of these claims and
litigation,  considering  amounts  accrued,  but excluding  potential  insurance
recoveries,  will not have a  material  adverse  effect on  Whitman's  financial
condition or the results of operations.

Item 2. PROPERTIES.

     General Bottlers' facilities include five bottling plants, four combination
bottling/canning  plants  and four  canning  plants  with a total  manufacturing
capacity of  approximately  550,000 square feet. In addition,  General  Bottlers
operates from 72 distribution  facilities,  including 16 distribution facilities
located  in  Eastern  Europe,  with five new  facilities  added in  portions  of
northwest  Russia and the  Baltics  during  1997.  Sixteen  of the  distribution
facilities  are  leased  and  approximately  13  percent  of  General  Bottlers'
production  is from its one leased  domestic  plant.  The Company  believes  all
facilities are adequately equipped and maintained and capacity is sufficient for
its current  needs.  General  Bottlers  currently  operates a fleet of more than
3,000  vehicles  in the  U.S.  and  nearly  700  vehicles  in its  international
operations to service its existing routes.
     In addition,  Whitman owns various  industrial,  commercial and residential
real estate properties in the United States and a leasing company,  which leases
approximately  2,000  railcars,  comprised of  locomotives,  flatcars and hopper
cars, to the Illinois Central Railroad Company.

Item 3. LEGAL PROCEEDINGS.

     Whitman and its subsidiaries are defendants in numerous  lawsuits,  none of
which,  in the opinion of  management,  are expected to have a material  adverse
effect on Whitman's results of operations or financial condition.
     See also "Environmental Matters" in Item 1.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

                                     PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The  common  stock of the  Company  is listed  and  traded on the New York,
Chicago and Pacific  stock  exchanges.  The table below sets forth the  reported
high and low sales  prices as  reported  for New York Stock  Exchange  Composite
Transactions  for Whitman  common stock and indicates the Whitman  dividends for
each quarterly period for the years 1997 and 1996.

                                                     Common
                                      ------------------------------------
                                         High         Low         Dividend
                                      ---------    ---------      --------
1997:
-----
1st quarter                           $ 24.625     $ 21.625       $ 0.105
2nd quarter                             26.750       22.625         0.115
3rd quarter                             27.250       24.125         0.115
4th quarter                             28.125       24.250         0.115

1996:
-----
1st quarter                           $ 25.000     $ 21.750       $ 0.095
2nd quarter                             25.750       22.875         0.105
3rd quarter                             24.625       21.875         0.105
4th quarter                             25.125       22.375         0.105


     There were 16,948 shareholders of record at December 31, 1997.

Item 6. SELECTED FINANCIAL DATA.

     Included in Note 17 to the Consolidated Financial Statements.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Liquidity and Capital Resources

     The  Company's  net cash  from  operating  activities  increased  by $133.0
million in 1997 to $270.2  million.  
     Net cash provided by continuing  operations remained strong,  increasing by
$7.0 million to $152.9 million.  Income from continuing  operations  declined by
$32.0 million,  principally due to the impact of special charges,  which reduced
income by $31.6  million after income taxes and minority  interest.  The special
charges  required only a minimal use of cash during 1997,  reducing cash by $2.4
million.  Changes  in  primary  working  capital  (defined  as  receivables  and
inventories less payables) required a net additional investment of $13.8 million
in 1997 compared with a net reduction of $6.0 million in the prior year. Changes
in the individual  working capital accounts were not significant.  A significant
portion of the change in other assets and  liabilities  resulted from a recently
settled  audit with the  Internal  Revenue  Service  ("IRS")  for the years 1988
through 1991. This  settlement  resulted in refunds of $44.7 million in 1997, of
which $10.7 million was related to continuing operations.
     Net cash provided by discontinued  operations improved by $126.0 million in
1997. The sharp increase  principally  resulted from the positive net cash flows
from Hussmann and Midas,  which were reclassified to discontinued  operations in
1997, due in part to strong  improvements in the management of working  capital.
The cash provided by discontinued operations in 1997 also included the remaining
portion of the IRS audit settlement, discussed above, for the years 1988 through
1991.  In  addition,  net cash  provided by  discontinued  operations  reflected
environmental expenditures,  net of insurance recoveries,  related to previously
sold subsidiaries.
     The Company  invested  $81.5  million,  net of proceeds,  in its operations
during 1997  compared  with a net  investment  of $85.6  million in the previous
year.  Included  was $83.4  million  for  capital  expenditure  programs in 1997
compared  with $87.2  million in the prior  year.  It is expected  that  capital
spending in 1998, excluding acquisitions, will surpass 1997 levels due, in part,
to planned increased investment in vending equipment,  additional  investment in
information  technology  systems, as well as other anticipated capital programs.
In 1997, General Bottlers acquired the Pepsi-Cola bottler in St. Petersburg from
PepsiCo for $20.2  million.  To support  its  international  expansion,  General
Bottlers  also  invested  $2.2  million and $30.6  million in its joint  venture
manufacturing  operations  in  Poland  in  1997  and  1996,  respectively.   The
investment in the joint venture in 1996  included a new  manufacturing  facility
near Poznan,  Poland.  Purchases and sales of investments  principally relate to
the Company's insurance  subsidiary,  which provides certain levels of insurance
for General Bottlers and the now discontinued  operations of Hussmann and Midas.
Funds  provided  through  premiums are invested by the insurance  subsidiary and
proceeds from the sale of  investments  are used by the insurance  subsidiary to
pay claims to the extent  required.  A substantial  portion of the purchases and
sales of such investments are reinvested as the investments mature. In 1997, the
Company  liquidated  $10.0  million  of the  insurance  subsidiary's  investment
portfolio,  compared with a liquidation  of $70.0 million in the previous  year;
the funds were used to reduce  outside  indebtedness  and for general  corporate
purposes.
     During 1997,  financing  activities resulted in a net use of funds totaling
$136.4  million  compared with a net use of $113.3  million in 1996. The Company
issued $75.0 million of long-term debt (see Note 6 to the Consolidated Financial
Statements)  during 1997, of which $25.0 million  related to the acquisition and
ongoing operating  requirements of the newly acquired  franchise in Russia.  The
remaining  $50.0  million of debt  issued in 1997  replaced  debt which  matured
during the year. A total of $95.5 million of debt was repaid in 1997,  including
a $30.0 term loan  scheduled  to mature in 2000.  As part of its  ongoing  share
repurchase program,  the Company repurchased 3.3 million shares of its stock for
$82.1 million.  During the previous year it used $93.2 million to acquire nearly
4.0 million shares.  The Company paid dividends of $45.6 million in 1997,  based
on an annual cash dividend  level of $0.45 per share compared with $42.9 million
(annually  $0.41 per share) in the previous  year.  The issuance of common stock
from the exercise of stock options  resulted in cash inflows of $11.8 million in
1997, compared with $14.6 million in 1996.
     At  December  31,  1997,  the Company had $300  million  available  under a
contractual  revolving  credit  facility  and $200 million  available  under its
commercial paper program.  Neither facility was in use at December 31, 1997. The
Company  believes that with strong  operating cash flows, its available lines of
credit,  cash received from Hussmann and Midas in connection with the spin-offs,
and the  potential  for  additional  debt and  equity  offerings,  it will  have
sufficient  resources to fund its future growth and expansion,  including  funds
for capital expenditures and possible acquisitions.

Operating Results -  1997 compared with 1996
--------------------------------------------

     For a  description  of the  Company's  major  products  and  its  principal
markets,  reference is made to Part I, Item 1, Business, and to Note 16, Segment
Reporting, to the Consolidated Financial Statements.

Sales

     Sales  increased  by $56.1  million,  or 3.7  percent,  in 1997 to $1,557.5
million.
     Domestic  sales  increased by $12.9  million,  or 0.9  percent,  in 1997 to
$1,464.0 million.  Unit case volume (which represented  approximately 88 percent
of total sales) in the U.S.  increased  by 4.8  percent.  The increase in volume
principally reflected growth in Mountain Dew, Dr Pepper, Mug Root Beer and Sunny
Delight, with Pepsi brand product sales volume being essentially flat with 1996.
This  increase  in volume  was  offset to a large  degree by lower  average  net
selling prices.  The average net selling price on this unit case volume fell 4.2
percent  below the prior year,  reflecting  the  extremely  competitive  pricing
environment  throughout General Bottlers' domestic markets,  particularly in the
supermarket channel.
     International  sales  increased  by $43.2  million  to $93.5  million.  The
increase  principally  reflected General Bottlers' expansion into newly acquired
territories in Russia and the Baltics.

Gross Profit

     The Company's  consolidated gross profit increased by $7.9 million,  or 1.4
percent, to $584.9 million.  The gross profit margin declined to 37.6 percent of
sales in 1997 from 38.4 percent in 1996.  This reduction  principally  reflected
the adverse effects of the competitive  pricing  pressures in General  Bottlers'
domestic  markets.  The domestic gross profit margin  declined by 0.4 percentage
points to 38.7 percent.  Contributing to the decline in the consolidated  margin
were lower  margin  sales in the newly  acquired  territories  in Russia and the
Baltics,  reflecting an extremely  competitive  pricing  environment and certain
inefficiencies  related to the start-up of these  operations.  Margins in Poland
improved,   reflecting  the  benefits  of  increased  volume  and  manufacturing
efficiencies.   Internationally,  the  gross  profit  margin  decreased  by  0.7
percentage points to 19.1 percent from 19.8 percent in the previous year.

Selling, General and Administrative

     Selling,  general and  administrative  (S,G&A) expenses  increased by $22.9
million,  or 6.2 percent,  compared with the 3.7 percent increase in sales. As a
result,  S,G&A expenses  increased to 25.0 percent of sales,  compared with 24.4
percent in 1996. The higher level of expenses reflected,  among other items, the
start-up of operations in Russia and the Baltics,  which accounted for more than
half of the  increase in S,G&A  expenses.  The  increase in S,G&A  expenses as a
percent of sales also reflected the competitive pricing environment during 1997.
     Corporate  administrative  expenses,  excluding  special  charges  of $34.5
million, declined slightly from $17.5 million in 1996 to $16.9 million in 1997.
     The  increase  in  amortization   expense   primarily   resulted  from  the
amortization of goodwill related to the acquisition in Russia.

Operating Income

     Operating  income  declined by $64.6  million,  or 33.2 percent,  to $130.2
million.  The  decrease was  primarily  the result of special  charges  incurred
during the third and fourth  quarters of 1997 totaling $49.3 million (see Note 3
to the Consolidated Financial Statements).
     General Bottlers' domestic operating income was down $24.1 million in 1997,
or 10.7  percent,  from the previous year to $200.3  million.  Included in these
results  were  special  charges  of  $11.1  million,  primarily  related  to the
consolidation of its divisions. The lower earnings also reflected the effects of
lower gross profit margins and higher  distribution  costs which were caused, in
part, by higher unit case volumes.
     General  Bottlers'  international  operating loss increased by $6.6 million
from the  previous  year to $18.7  million,  including  special  charges of $3.7
million in 1997. The increased  operating losses also reflected  start-up losses
of $6.9 million in Russia and the Baltics, offset by improved results in Poland,
which reduced its operating losses by approximately one-third.

Interest and Other Expenses

     Interest  expense,  net, did not change  significantly  on a year over year
basis.  Other  expenses,  net,  decreased by $7.6  million,  which was primarily
attributable to an $8.7 million charge recorded in 1996, principally relating to
asset write-downs at General Bottlers' joint venture in Poland.

Technology Systems and Year 2000 Issues

     As  the  year  2000  approaches,  the  Company  recognizes  customers'  and
shareholders'  concerns  regarding  its  systems  and its ability to produce and
distribute its products in an effective manner. The Company has identified which
systems  are not  presently  ready  for the new  millennium  and has  identified
options  available to make such  systems  ready for this  change.  In 1998,  the
Company will begin  implementation  of an  integrated  enterprise-wide  resource
planning ("ERP") system. The ERP  implementation,  while upgrading and expanding
the  capacity of existing  systems,  will make all  financial  systems year 2000
compliant.  The Company  expects to have system  changes which address year 2000
exposures,  including ERP financial systems  implementation,  in place and ready
prior to January 1, 2000, with no significant disruption to its operations.  The
Company  does not believe that the  financial  impact of making its systems year
2000 compliant will be material to the Company's  financial  position or results
of operations.
     The Company  recognizes  the impact  third  parties  have on its ability to
achieve  readiness  for the year  2000.  The  Company  is  discussing  year 2000
readiness with its key customers, suppliers and financial institutions.

Operating Results -  1996 compared with 1995
--------------------------------------------

Sales

     Sales  increased  by $52.7  million,  or 3.6  percent,  in 1996 to $1,501.4
million.
     Domestic  sales  increased by $37.2  million,  or 2.6  percent,  in 1996 to
$1,451.1 million.  Unit case volume (which represented  approximately 88 percent
of total sales) in the U.S.  increased  by 3.8 percent.  The average net selling
price on such  volume  fell  approximately  one  percent  below the prior  year,
reflecting the competitive pricing  environment  throughout the domestic markets
during the latter half of the year.
     International sales increased by $15.5 million in 1996, or 44.5 percent, to
$50.3 million. The increase in sales principally resulted from General Bottlers'
continued  expansion in Poland and  reflected an increase in case volume,  which
rose 33.6 percent during 1996, as well as improved pricing.

Gross Profit

     The Company's  consolidated gross profit increased by $38.8 million, or 7.2
percent, to $577.0 million.  The gross profit margin improved to 38.4 percent of
sales in 1996 from 37.2 percent in 1995. This improvement reflected the benefits
of  lower  ingredient  and  packaging  costs  in  General   Bottlers'   domestic
operations,  where the margin improved by 1.5 percentage points to 39.1 percent.
Additionally,  General Bottlers'  international  operations improved their gross
profit margins by 2.3 percentage points to 19.8 percent, reflecting the benefits
of higher volumes and pricing.

Selling, General and Administrative

     S,G&A expenses  increased by $24.3 million,  or 7.1 percent,  compared with
the 3.6 percent increase in sales. As a result, S,G&A expenses increased to 24.4
percent  of sales,  compared  with 23.6  percent in 1995.  The  higher  level of
expenses included,  among other items, the continued  expansion of operations in
Poland, which accounted for $4.7 million of the total increase in S,G&A expenses
in 1996.  The  remaining  increase  principally  resulted  from  higher  selling
expenses,  including  costs  associated  with the "Pepsi Stuff"  program,  which
represented  the largest  promotion ever  sponsored by PepsiCo.  The increase in
S,G&A  expenses,  as a percent  of  sales,  also  reflects  the  effects  of the
competitive  pricing  environment  during  the  latter  half of 1996.  Corporate
administrative  expenses increased by $0.9 million to $17.5 million.  There were
no  significant  items which caused the increase.  
     The increase in amortization  expense was primarily  attributable to a full
year's  impact of goodwill  amortization  related to the Cedar Rapids  franchise
acquisition made during 1995.

Operating Income

     Operating  income  increased by $13.7  million,  or 7.6 percent,  to $194.8
million.
     Domestically,  General Bottlers'  operating income increased $15.4 million,
or 7.4 percent, to $224.4 million.  The operating margin, as a percent of sales,
increased  to 15.5 percent  from 14.8  percent in 1995.  The  improved  domestic
results  reflected  the benefits of higher  sales  volume,  together  with lower
ingredient and packaging costs.
     Internationally,  operating  losses  increased  by $0.8  million  to  $12.1
million,  as General Bottlers  continued to expand and build its market position
in Poland.

Interest and Other Expenses

     Interest  expense  declined  by $2.1  million  in 1996  to  $68.2  million,
resulting from lower average  interest rates.  Interest income increased by $2.1
million in 1996 to $3.0 million,  due in part to loans made to General Bottlers'
joint venture in Poland, as well as an increase in temporary funds available for
short-term investment.  The remaining decrease in interest expense, net, related
to increased  interest income on loans and advances to Hussmann and Midas, which
were reclassified to discontinued operations in December,  1997. Other expenses,
net,  increased by $10.3 million,  which was primarily  attributable  to an $8.7
million charge recorded in 1996,  principally  relating to asset  write-downs at
General Bottlers' joint venture in Poland.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     See Index to Financial Information.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE.

     None.
                                    PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Whitman  incorporates  by reference  the  information  contained  under the
caption  "Election of Directors" in its definitive  proxy  statement dated March
20, 1998,  filed  pursuant to Section  14(a) of the  Securities  Exchange Act of
1934, as amended.
     The  executive  officers of Whitman and their ages as of March 1, 1998 were
as follows:

                           Age              Position
                           ---              --------
Bruce S. Chelberg          63      Chairman and Chief Executive Officer
Thomas L. Bindley          54      Executive Vice President
Robert C. Cushing          45      Corporate Vice President and President, 
                                    Pepsi-Cola General Bottlers, Inc.
Frank T. Westover          59      Senior Vice President-Controller
Lawrence J. Pilon          49      Senior Vice President-Human Resources
Charles H. Connolly        63      Vice President-Corporate Affairs and Investor
                                    Relations
William B. Moore           56      Vice President, Secretary and General Counsel

     Except as  described  in the  following  paragraph  or as  incorporated  by
reference to the Registrant's  definitive proxy statement,  all of the executive
officers  of Whitman  have held  positions  which are the same or which  involve
substantially similar functions as indicated above during the past five years.
     Mr.  Pilon  joined  Whitman  Corporation  as  Senior  Vice  President-Human
Resources in February,  1994.  Prior to joining Whitman  Corporation,  Mr. Pilon
served as Vice  President-Human  Resources and Secretary of National Intergroup,
Inc. from June, 1986 to January,  1994. In 1997, Mr. Cushing became President of
Pepsi-Cola  General  Bottlers,  Inc.  and  Corporate  Vice  President of Whitman
Corporation.  Mr. Cushing joined General  Bottlers in 1984 and has  subsequently
held various executive positions,  serving as Executive Vice President-Marketing
and Strategic Planning from 1996-1997. 

Item 11. EXECUTIVE COMPENSATION.

     Whitman  incorporates  by reference  the  information  contained  under the
caption  "Executive  Compensation"  and the last  paragraph  under  the  caption
"General  Information"  in its definitive  proxy statement dated March 20, 1998,
filed  pursuant to Section  14(a) of the  Securities  Exchange  Act of 1934,  as
amended.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Whitman  incorporates  by reference  the  information  contained  under the
captions  "Principal  Shareholders"  and "Securities  Ownership of Directors and
Executive  Officers" in its  definitive  proxy  statement  dated March 20, 1998,
filed  pursuant to Section  14(a) of the  Securities  Exchange  Act of 1934,  as
amended.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     None.

                                     PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a) See Index to Financial Information and Exhibit Index.

     (b) Through December 31, 1997, no reports on Form 8-K were filed subsequent
         to the Registrant's Quarterly Report on Form 10-Q for the quarter ended
         September 30, 1997.
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized  on the 20th day of
March, 1998.

                                    WHITMAN CORPORATION

                                    By:  /s/ FRANK T. WESTOVER
                                         --------------------------------   
                                         Frank T. Westover
                                         Senior Vice President-Controller

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  in the  capacities
indicated on the 20th day of March, 1998.

     Signature                      Title

*   Bruce S. Chelberg               Chairman and Chief
    ------------------------        Executive Officer and Director
    BRUCE S. CHELBERG               (principal executive officer)

*   Thomas L. Bindley               Executive Vice President
    ------------------------        (principal financial officer)
    THOMAS L. BINDLEY                          

    /s/ FRANK T. WESTOVER           Senior Vice President-Controller
    ------------------------        (principal accounting officer)
    FRANK T. WESTOVER                          

*   Herbert M. Baum                 Director
    ------------------------
    HERBERT M. BAUM

*   Richard G. Cline                Director     *By:  /s/ FRANK T. WESTOVER
    ------------------------                            ---------------------
    RICHARD G. CLINE                                   Frank T. Westover
                                                       Attorney-in-Fact
*   Pierre S. duPont                Director           March 20, 1998
    ------------------------
    PIERRE S. du PONT

*   Archie R. Dykes                 Director
    ------------------------
    ARCHIE R. DYKES

*   Charles W. Gaillard             Director
    ------------------------
    CHARLES W. GAILLARD

*   Jarobin Gilbert, Jr.            Director
    ------------------------
    JAROBIN GILBERT, JR.

*   Victoria J. Gregoricus          Director
    ------------------------
    VICTORIA J. GREGORICUS

*   Donald P. Jacobs                Director
    ------------------------
    DONALD P. JACOBS

*   Charles S. Locke                Director
    ------------------------
    CHARLES S. LOCKE
<PAGE>
                      WHITMAN CORPORATION AND SUBSIDIARIES



                             ----------------------

                              FINANCIAL INFORMATION


                   FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K

                       FISCAL YEAR ENDED DECEMBER 31, 1997
<PAGE>
                      WHITMAN CORPORATION AND SUBSIDIARIES
                         INDEX TO FINANCIAL INFORMATION



                                                                           
Statement of Financial Responsibility

Independent Auditors' Report

Consolidated Statements of Income for the years ended December 31, 1997, 1996 
and 1995

Consolidated Balance Sheets as of December 31, 1997 and December 31, 1996

Consolidated Statements of Cash Flows for the years ended December 31, 1997, 
1996 and 1995

Consolidated Statements of Shareholders' Equity for the years ended December 31,
1997, 1996 and 1995

Notes to Consolidated Financial Statements

Selected Financial Data

Financial Statement Schedules:

     Financial  statement  schedules  have  been  omitted  because  they are not
     applicable or the required information is shown in the financial statements
     or related notes.
<PAGE>
                      STATEMENT OF FINANCIAL RESPONSIBILITY

     The   consolidated   financial   statements  of  Whitman   Corporation  and
subsidiaries  have been prepared by management  which is  responsible  for their
integrity and content.  These  statements  have been prepared in accordance with
generally  accepted  accounting  principles  and include  amounts  which reflect
certain estimates and judgments by management.  Actual results could differ from
these estimates.
     The Board of Directors,  acting  through the Audit  Committee of the Board,
has  responsibility  for  determining  that  management  fulfills  its duties in
connection with the preparation of these consolidated financial statements.  The
Audit Committee meets  periodically and privately with the Independent  Auditors
and with the internal  auditors to review matters relating to the quality of the
financial reporting of the Company,  the related internal controls and the scope
and results of their audits.  The Committee  also meets with  management and the
internal audit staff to review the affairs of the Company.
     To meet management's responsibility for the fair and objective reporting of
the results of operations and financial condition, the Company maintains systems
of internal  controls  and  procedures  to provide  reasonable  assurance of the
reliability of its accounting  records.  These systems include written  policies
and  procedures,  a  substantial  program  of  internal  audit  and the  careful
selection and training of its financial staff.
     The Company's Independent  Auditors,  KPMG Peat Marwick LLP, are engaged to
audit the  consolidated  financial  statements of the Company and to issue their
report  thereon.  Their audit has been  conducted in accordance  with  generally
accepted auditing standards. Their report appears on the following page.
<PAGE>
                          INDEPENDENT AUDITORS' REPORT



THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF WHITMAN CORPORATION:

     We have audited the  accompanying  consolidated  balance  sheets of Whitman
Corporation  and  subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income,  shareholders' equity and cash flows for each
of  the  years  in  the  three-year   period  ended  December  31,  1997.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.
     We conducted  our audits in accordance  with  generally  accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.
     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the financial  position of Whitman
Corporation  and  subsidiaries at December 31, 1997 and 1996, and the results of
their  operations  and their cash flows for each of the years in the  three-year
period ended December 31, 1997, in conformity with generally accepted accounting
principles.


/s/ KPMG Peat Marwick LLP

KPMG Peat Marwick LLP
Chicago, Illinois
January 16, 1998
<PAGE>
Whitman Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31
(in millions, except for earnings per share)                                            1997         1996         1995
                                                                                     ----------   ----------   ----------
<S>                                                                                  <C>          <C>          <C>
Sales                                                                                $  1,557.5   $  1,501.4   $  1,448.7
Cost of goods sold                                                                        972.6        924.4        910.5
                                                                                     ----------   ----------   ----------
   Gross profit                                                                           584.9        577.0        538.2
Selling, general and administrative expenses                                              389.7        366.8        342.5
Amortization expense                                                                       15.7         15.4         14.6
Special charges (Note 3)                                                                   49.3           --           --
                                                                                     ----------   ----------   ----------
   Operating income                                                                       130.2        194.8        181.1
Interest expense, net (Note 4)                                                            (42.3)       (41.5)       (47.6)
Other expense, net                                                                        (18.0)       (25.6)       (15.3)
                                                                                     ----------   ----------   ----------
   Income before income taxes                                                              69.9        127.7        118.2
Income taxes (Note 5)                                                                      37.9         61.1         52.8
                                                                                     ----------   ----------   ----------
   Income from continuing operations before minority interest                              32.0         66.6         65.4
Minority interest                                                                          16.2         18.8         18.6
                                                                                     ----------   ----------   ----------
   Income from continuing operations                                                       15.8         47.8         46.8
   Income (loss) from discontinued operations after taxes (Note 2)                        (11.7)        91.6         86.7
                                                                                     ----------   ----------   ----------
   Net income                                                                        $      4.1   $    139.4   $    133.5
                                                                                     ==========   ==========   ==========

Average number of common shares outstanding - Basic                                       101.6        104.8        104.9
                                                                                     ==========   ==========   ==========
Average number of common shares outstanding - Diluted                                     102.9        106.0        106.0
                                                                                     ==========   ==========   ==========

Income (Loss) Per Common Share - Basic:
Continuing operations                                                                $     0.16   $     0.46   $     0.44
Discontinued operations                                                                   (0.12)        0.87         0.83
                                                                                     ----------   ----------   ----------
Net income                                                                           $     0.04   $     1.33   $     1.27
                                                                                     ==========   ==========   ==========

Income (Loss) Per Common Share  - Diluted:
Continuing operations                                                                $     0.15   $     0.45   $     0.44
Discontinued operations                                                                   (0.11)        0.87         0.82
                                                                                     ----------   ----------   ----------
Net income                                                                           $     0.04   $     1.32   $     1.26
                                                                                     ==========   ==========   ==========
Cash dividends per common share                                                      $     0.45   $     0.41   $     0.37
                                                                                     ==========   ==========   ==========
</TABLE>

The following notes are an integral part of these statements.
<PAGE>
Whitman Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As of December 31
(in millions)                                                                                        1997         1996
                                                                                                  ----------   ----------
<S>                                                                                               <C>          <C>
ASSETS:
Current assets:
   Cash and cash equivalents                                                                      $     52.4   $      4.7
   Receivables, net of allowance for doubtful accounts of $3.4 million in 1997 and
      $1.7 million in 1996                                                                             131.7        125.4
   Inventories:
      Raw materials and supplies                                                                        28.1         23.8
      Finished goods                                                                                    41.8         40.2
                                                                                                  ----------   ----------
         Total inventories                                                                              69.9         64.0
   Other current assets                                                                                 36.3         47.9
   Net current assets of companies held for disposition                                                270.5        356.1
                                                                                                  ----------   ----------
        Total current assets                                                                           560.8        598.1
                                                                                                  ----------   ----------
Investments                                                                                            157.0        176.6
Property (at cost):
     Land                                                                                               14.9         15.7
     Buildings and improvements                                                                        161.3        148.4
     Machinery and equipment                                                                           702.0        666.5
                                                                                                  ----------   ----------
        Total property                                                                                 878.2        830.6
     Accumulated depreciation and amortization                                                        (471.6)      (447.0)
                                                                                                  ----------   ----------
        Net property                                                                                   406.6        383.6
                                                                                                  ----------   ----------
Goodwill, net of accumulated amortization of $140.8 million in 1997 and
   $125.1 million in 1996                                                                              462.6        469.2
Other assets                                                                                            49.5         33.8
Net non-current assets of companies held for disposition                                               393.2        419.3
                                                                                                  ----------   ----------
     Total assets                                                                                 $  2,029.7   $  2,080.6
                                                                                                  ==========   ==========

</TABLE>
The following notes are an integral part of these statements.
<PAGE>
Whitman Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As of December 31
(in millions)                                                                                        1997         1996
                                                                                                  ----------   ----------
<S>                                                                                               <C>          <C>
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
   Short-term debt, including current maturities of long-term debt                                $    282.5   $     85.5
   Accounts and dividends payable                                                                       97.8        100.8
   Income taxes payable                                                                                  2.9          3.0
   Accrued expenses:
     Salaries and wages                                                                                 16.1         18.3
     Interest                                                                                           20.7         21.0
     Other                                                                                              70.0         41.2
                                                                                                  ----------   ----------
        Total current liabilities                                                                      490.0        269.8
                                                                                                  ----------   ----------
Long-term debt                                                                                         604.7        821.7
Deferred income taxes                                                                                   75.4         30.7
Other liabilities                                                                                       98.4         85.2
Minority interest                                                                                      221.5        231.0
Shareholders' equity:
   Common stock  (without par, 250.0 million  shares  authorized;  111.7 million
     issued at December 31, 1997 and 110.6 million issued at December 31, 1996)                        478.2        456.3
   Retained income                                                                                     363.4        402.0
   Cumulative translation adjustment                                                                   (78.8)       (57.8)
   Unrealized investment gain                                                                            0.2          1.8
   Treasury stock (10.6 million shares at December 31, 1997 and 8.0 million shares at
     December 31, 1996)                                                                               (223.3)      (160.1)
                                                                                                  ----------   ----------
     Total shareholders' equity                                                                        539.7        642.2
                                                                                                  ----------   ----------

     Total liabilities and shareholders' equity                                                   $  2,029.7   $  2,080.6
                                                                                                  ==========   ==========

</TABLE>
The following notes are an integral part of these statements.
<PAGE>
Whitman Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31
(in millions)                                                                            1997          1996        1995
                                                                                      ---------     ---------   ---------
<S>                                                                                   <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations                                                     $    15.8    $    47.8    $    46.8
Adjustments to reconcile to net cash provided by operating activities:
   Depreciation and amortization                                                           73.8         75.2         70.6
   Special charges not affecting cash                                                      46.9           --           --
   Other                                                                                   16.5         25.3         13.4
Changes in assets and liabilities, exclusive of acquisitions:
   (Increase) decrease in receivables                                                      (5.8)         2.4          6.9
   (Increase) decrease in inventories                                                      (2.4)         1.8         (8.8)
   Increase (decrease) in payables                                                         (5.6)         1.8          7.6
   Net change in other assets and liabilities                                              13.7         (8.4)       (19.7)
                                                                                      ---------    ---------    ---------
Net cash provided by continuing operations                                                152.9        145.9        116.8
Net cash provided by (used in) discontinued operations                                    117.3         (8.7)         1.5
                                                                                      ---------    ---------    ---------
   Net cash provided by operating activities                                              270.2        137.2        118.3
                                                                                      ---------    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital investments                                                                       (83.4)       (87.2)      (111.1)
Proceeds from sales of property                                                             1.9          1.6          7.8
Companies acquired, net of cash acquired                                                  (20.2)          --        (52.7)
Investments in joint ventures, net                                                         (2.2)       (30.8)       (18.6)
Purchases of investments                                                                  (38.8)       (92.1)      (221.2)
Proceeds from sales of investments                                                         57.1        176.1        213.4
                                                                                      ---------    ---------    ---------
   Net cash used in investing activities                                                  (85.6)       (32.4)      (182.4)
                                                                                      ---------    ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayment of bank lines of credit and commercial paper                                   --        (15.0)       (27.5)
Proceeds from issuance of long-term debt                                                   75.0        124.2        277.6
Repayment of long-term debt                                                               (95.5)      (101.0)      (144.1)
Issuance of common stock                                                                   11.8         14.6         12.8
Treasury stock purchases                                                                  (82.1)       (93.2)       (18.8)
Common dividends                                                                          (45.6)       (42.9)       (38.8)
                                                                                      ---------    ---------    ---------
   Net cash provided by (used in) financing activities                                   (136.4)      (113.3)        61.2
                                                                                      ---------    ---------    ---------
Effects of exchange rate changes on cash and cash equivalents                              (0.5)        (0.3)        (0.2)
                                                                                      ----------   ---------    ---------
Change in cash and cash equivalents                                                        47.7         (8.8)        (3.1)
Cash and cash equivalents at beginning of year                                              4.7         13.5         16.6
                                                                                      ---------    ---------    ---------
Cash and cash equivalents at end of year                                              $    52.4    $     4.7    $    13.5
                                                                                      =========    =========    =========

</TABLE>
The following notes are an integral part of these statements.
<PAGE>
Whitman Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
For the years ended
December 31, 1997,                                                              
1996 and 1995                          Common Stock                    Cumulative    Unrealized       Treasury Stock
                                 -----------------------    Retained   Translation   Investment    --------------------        
(dollars in millions)              Shares         Amount     Income    Adjustment    Gain/(Loss)     Shares      Amount
                                 -----------     -------    -------    -----------   -----------   ----------   -------
<S>                              <C>             <C>        <C>        <C>           <C>           <C>          <C>        
Balance, January 1, 1995         108,104,990     $ 413.2    $ 215.2    $     (27.1)  $       1.3   (3,073,316)  $ (50.0)
                                 -----------     -------    -------    -----------   -----------   ----------   -------
Net income                                                    133.5
Treasury stock purchases                                                                           (1,034,726)    (18.8)
Stock compensation plans           1,094,844        14.6        2.0                                   (19,564)      0.1
Common stock issued for
   acquisitions                                                                                       126,700       2.7
Translation adjustments                                                      (28.5)
Unrealized investment gain                                                                   8.4
Dividends declared                                            (38.8)
                                 -----------     -------    -------    -----------   -----------   ----------   -------
Balance, December 31, 1995       109,199,834       427.8      311.9          (55.6)          9.7   (4,000,906)    (66.0)
                                 -----------     -------    -------    -----------   -----------   ----------   -------
Net income                                                    139.4
Treasury stock purchases                                                                           (3,989,894)    (93.2)
Stock compensation plans           1,395,959        28.5       (6.4)                                  (29,188)     (1.2)
Common stock issued for
   acquisitions                                                                                        11,614       0.3
Translation adjustments                                                       (2.2)
Unrealized investment loss                                                                  (7.9)
Dividends declared                                            (42.9)
                                 -----------     -------    -------    -----------   -----------   ----------   -------
Balance, December 31, 1996       110,595,793       456.3      402.0          (57.8)          1.8   (8,008,374)   (160.1)
                                 -----------     -------    -------    -----------   -----------   ----------   -------
Net income                                                      4.1
Treasury stock purchases                                                                           (3,323,200)    (82.1)
Stock compensation plans           1,123,903        21.9        2.9                                   (63,743)     (1.5)
Common stock issued for
   outstanding General Bottlers
   non-voting preferred stock
   (Note 12)                                                                                          794,115      20.4
Translation adjustments                                                      (21.0)
Unrealized investment loss                                                                  (1.6)
Dividends declared                                            (45.6)
                                 -----------     -------    -------    -----------   -----------  -----------   -------
Balance, December 31, 1997       111,719,696     $ 478.2    $ 363.4    $     (78.8)  $       0.2  (10,601,202)  $(223.3)
                                 ===========     =======    =======    ===========   ===========  ===========   =======

</TABLE>
The following notes are an integral part of these statements.
<PAGE>
Whitman Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION.  The consolidated  financial statements include the
accounts of Whitman  Corporation  and all of its significant  subsidiaries  (the
"Company").  The Company's  financial  statements have been restated to classify
the  results  of  operations  and net  assets of  Hussmann  International,  Inc.
("Hussmann") and Midas, Inc. ("Midas") as discontinued operations.  Accordingly,
all amounts included in the Notes to Consolidated  Financial  Statements pertain
to continuing operations except where otherwise noted. See further discussion in
Note 2. Operations outside the United States and its territories are included in
the  consolidated  financial  statements  on the  basis of fiscal  years  ending
October  31. 
CASH AND CASH  EQUIVALENTS.  Cash and cash equivalents  consist of deposits with
banks and financial institutions which are unrestricted as to withdrawal or use,
and which have original maturities of three months or less.
INVENTORIES. Inventories are valued at the lower of cost (principally determined
on the average method) or net realizable value. 
INVESTMENTS.  Investments  include  real  estate held for sale,  principally  at
Illinois Center, a large single location,  mixed use development  located on the
Chicago  lakefront.  The  investments  in real  estate are carried at cost which
management  believes  is lower than net  realizable  value.  When real estate is
sold, the net proceeds are deducted from the carrying value. Investments include
General Bottlers' minority interest in a manufacturing  joint venture in Poland.
Also  included  are  domestic  and U.S.  dollar-denominated  foreign  government
securities and securities guaranteed by such governments or their agencies, bank
obligations and corporate  obligations (which are recorded at fair market value)
and other miscellaneous investments. 
PROPERTY. Depreciation is computed on the straight-line method. When property is
sold or retired,  the cost and accumulated  depreciation are eliminated from the
accounts and gains or losses are recorded in other  expense,  net.  Expenditures
for maintenance and repairs are expensed as incurred.  The approximate ranges of
annual  depreciation  rates are 2.5  percent to 6.7 percent  for  buildings  and
improvements and 8 percent to 20 percent for machinery and equipment.
GOODWILL.  Goodwill  principally  represents the excess of cost over fair market
value of tangible  assets of acquired  businesses.  Such amounts  generally  are
being amortized on straight-line  bases over 40 years.  Goodwill associated with
foreign operations is not significant.
CARRYING VALUES OF LONG-LIVED  ASSETS. The Company evaluates the carrying values
of its long-lived assets by reviewing undiscounted cash flows by operating unit.
Such evaluations are performed  whenever events and circumstances  indicate that
the  carrying  value  of an  asset  may  not be  recoverable.  If the sum of the
projected  undiscounted  cash flows over the  estimated  remaining  lives of the
related assets does not exceed the carrying  value,  the carrying value would be
adjusted for the difference between the fair value and the carrying value.
REVENUE  RECOGNITION.   Revenue  is  recognized  when  title  to  a  product  is
transferred to the customer.
ADVERTISING.  Advertising  expenditures  are  expensed  in  the  year  incurred.
STOCK-BASED  COMPENSATION.  The  Company  has  elected to  continue to apply the
provisions  of Accounting  Principles  Board (APB) Opinion No. 25 and to display
the estimated pro forma effects measured under Statement of Financial Accounting
Standards  (SFAS) No. 123,  "Accounting  for Stock-Based  Compensation",  in the
Notes to the Consolidated  Financial Statements (see Note 10). 
INTEREST  RATE AND  CURRENCY  SWAPS.  The Company has entered  into a variety of
interest rate and currency  swaps in its management of interest rate and foreign
currency  exposures  (see Note 7). The  differential  to be paid or  received is
accrued  as  interest  rates  change  and is  recognized  over the  lives of the
agreements.  Realized  and  unrealized  gains  and  losses on  foreign  currency
transactions  are  recognized in other  expense,  net. The Company  periodically
monitors  its  financial  instrument  positions  and the  credit  ratings of its
counterparties and limits the amount of exposure with any one counterparty.
INCOME PER SHARE.  Per share  earnings have been  calculated in accordance  with
SFAS No. 128, "Earnings Per Share".  Basic earnings per share are based upon the
weighted-average number of common shares outstanding. Diluted earnings per share
assumes the exercise of all options which are dilutive,  whether  exercisable or
not. The  adoption of this new  Standard  did not have a material  effect on per
share earnings as previously  reported.  
PRIOR PERIOD  RESTATEMENT.  In the third quarter of 1997, the Company determined
that certain  transactions related to periods prior to 1992 had been recorded in
such a manner that there was a  misclassification  between certain components of
shareholders' equity. The retained income and cumulative  translation adjustment
accounts   have  been   adjusted   by   equivalent   amounts  to  correct   this
misclassification.

2.   DISCONTINUED OPERATIONS

     In December,  1997,  the Board of  Directors  authorized  the  spin-offs of
Hussmann  and Midas to Whitman  shareholders  on January 30, 1998 (see Note 15 -
"Subsequent  Events").  The consolidated  financial statements and related notes
thereto  have  been  restated  to  classify  these  businesses  as  discontinued
operations.
     Selected  financial  information for Hussmann and Midas for the years ended
December 31, 1997, 1996 and 1995 is shown below (in millions):

Hussmann:                                 1997          1996         1995
---------                              ---------     ---------    ---------

Sales and revenues                     $ 1,096.2     $ 1,005.7    $   921.7
Operating income                            43.0          93.8         78.7

Midas:                                    
------

Sales and revenues                     $   596.4     $   604.2    $   576.1
Operating income (loss)                     (0.8)         78.0         82.5


     Included in the 1997  operating  income  (loss) for Hussmann and Midas were
special  charges of $56.3 million and $67.6 million,  respectively.  The special
charges at Hussmann  primarily  related to the write-off of goodwill in its U.K.
operations,  a  restructuring  of the U.K.  operations and a  reorganization  of
certain  manufacturing  operations  in the U.S.  The  special  charges  at Midas
principally  related to its  decision to franchise  or close  substantially  all
company-operated  stores in the U.S., to enhance certain franchise  programs and
to reflect the impairment of certain assets.
     The  results  of tax  settlements  with the IRS in 1997 for the years  1988
through 1991, which related to previously discontinued operations, amounted to a
net expense of $2.9  million,  which was recorded in the third  quarter of 1997.
During  the  fourth  quarter  of 1997,  the  Company  recorded  $1.3  million of
additional  tax expense  resulting  from the refinement of deferred tax balances
related to discontinued operations.
     Results from  discontinued  operations were reported net of income taxes of
$39.1  million,  $56.1  million  and  $54.6  million  in 1997,  1996  and  1995,
respectively.

3.   SPECIAL CHARGES

     In the third and fourth  quarters  of 1997,  the Company  recorded  special
charges  totaling $49.3 million.  General  Bottlers  recorded special charges of
$14.8 million to  consolidate  the number of its domestic  divisions,  including
reductions in staffing levels,  and to write-down certain assets in its domestic
and foreign  operations.  Whitman  Corporate  recorded  special charges of $34.5
million,  principally  relating to the  elimination  of  essentially  all of the
Whitman  Corporate  management  and staff and for expenses  associated  with the
spin-offs.
     The following table  summarizes the special  charges  recorded during 1997,
utilization  through December 31, 1997, and the remaining accrued liabilities at
December 31, 1997 (in millions):

                                           General       Whitman
Special charges:                           Bottlers     Corporate       Total
---------------                           ---------     ---------     ---------
   Employee related costs                 $     9.1     $    27.0     $    36.1
   Asset writedowns                             4.7           0.7           5.4
   Spin-off related costs and other             1.0           6.8           7.8
                                          ---------     ---------     ---------
   Total                                       14.8          34.5          49.3
                                          ---------     ---------     ---------
Utilization:
-----------
   Employee related costs                      (0.9)         (2.6)         (3.5)
   Asset writedowns                            (4.7)         (0.7)         (5.4)
   Spin-off related costs and other              --          (1.5)         (1.5)
                                          ---------     ---------     ---------
   Total                                       (5.6)         (4.8)        (10.4)
                                          ---------     ---------     ---------
Accrued liabilities at December 31, 1997  $     9.2     $    29.7     $    38.9
                                          =========     =========     ==========

     Employee  related costs include  severance  payments for the management and
staff affected by the changes in the organizational  structure, as well as other
headcount  reduction  programs.  The total  number  of  employees  affected  was
approximately  125 at General  Bottlers and essentially all employees at Whitman
Corporate.  As of December 31, 1997,  87 employees  were  terminated  by General
Bottlers. The reduction of management and staff at Whitman Corporate is expected
to occur in 1998 and 1999.
     It is expected that  approximately  $28.1 million of the charges accrued at
December  31,  1997,  will be paid during the  subsequent  twelve  months.  Such
amounts  are  classified  in other  current  liabilities.  The  remaining  $10.8
million, principally related to severance and other employee costs, are expected
to be paid in 1999 and are classified in other non-current liabilities.

4.   INTEREST EXPENSE, NET

     Interest expense, net, consisted of the following (in millions):

                                               1997         1996         1995
                                              ------       ------       ------
   Interest expense                           $(69.0)      $(68.2)      $(70.3)
   Interest income from Hussmann and Midas      23.1         23.7         21.8
   Other interest income                         3.6          3.0          0.9
                                              ------       ------       ------
   Interest expense, net                      $(42.3)      $(41.5)      $(47.6)
                                              ======       ======       ======

     Interest income from Hussmann and Midas related to  intercompany  loans and
advances.  The  related  interest  expense  recorded  by  Hussmann  and Midas is
included in income (loss) from discontinued operations.
     The loans and advances to Hussmann  and Midas were repaid to Whitman  prior
to the  spin-offs  of  Hussmann  and Midas on  January  30,  1998 (see Note 15 -
"Subsequent Events").

5.   INCOME TAXES

     Income taxes consisted of:

(in millions)                                 1997        1996        1995
                                            -------     -------     -------
   Current:
     Federal                                $  33.3     $  39.0     $  37.6
     Foreign                                     --          --          --
     State and local                            7.2         8.3         5.9
                                            -------     -------     -------
       Total current                           40.5        47.3        43.5
                                            -------     -------     -------
   Deferred:
     Federal                                   (3.2)       12.8         6.6
     Foreign                                   (0.7)       (0.3)         --
     State and local                            1.3         1.3         2.7
                                            -------     -------     -------
       Total deferred                          (2.6)       13.8         9.3
                                            -------     -------     -------
   Total income taxes                      $   37.9     $  61.1     $  52.8
                                           ========     =======     =======

     The items which gave rise to  differences  between the income  taxes in the
income  statements  and income  taxes  computed at the U.S.  statutory  rate are
summarized below:
<TABLE>
<CAPTION>
                                                                         1997           1996            1995
                                                                     ------------   ------------    ------------
(dollars in millions)                                                Amount    %    Amount    %     Amount    %
                                                                     ------  ----   ------  ----    ------  ----
<S>                                                                  <C>     <C>    <C>     <C>     <C>     <C>     
Income tax expenses computed at the U.S. statutory rate              $ 24.5  35.0   $ 44.7  35.0    $ 41.4  35.0
State income taxes, net of federal income tax benefit                   5.6   8.0      6.2   4.9       5.6   4.7
Foreign losses with no foreign tax benefits                             6.5   9.3      7.2   5.6       4.0   3.4
Non-deductible goodwill amortization                                    4.3   6.2      4.5   3.5       4.8   4.1
Other items, net                                                       (3.0) (4.3)    (1.5) (1.2)     (3.0) (2.5)
                                                                     ------  ----   ------  ----    ------  ----
Income tax provisions                                                $ 37.9  54.2   $ 61.1  47.8    $ 52.8  44.7
                                                                     ======  ====   ======  ====    ======  ====
</TABLE>
     In 1997, the Company settled Federal income tax audits with the IRS for the
years 1988 through 1991. Accruals no longer required were credited to income and
were reflected in "other items, net" in the table above.

     Deferred  income taxes are created by "temporary  differences"  which exist
between  amounts of assets and  liabilities  recorded  for  financial  reporting
purposes  and such  amounts as  reported  under  income tax  regulations.  These
temporary differences, which gave rise to deferred tax assets and liabilities at
December 31, are attributable to:
<TABLE>
<CAPTION>
(in millions)                                                                      1997         1996
                                                                                ---------    ---------
<S>                                                                             <C>          <C>
Deferred tax assets:
Provision for special charges and previously sold businesses                    $    21.5    $    28.8
Foreign net operating loss carryforwards                                             18.8         12.4
Lease transactions                                                                   14.1         15.5
Unrealized losses on investments                                                      8.3          7.5
Pension and post-retirement benefits                                                  6.2          4.8
Self-insurance provisions                                                             2.5         13.8
Deferred compensation                                                                 4.5          5.4
Other                                                                                 8.4         15.5
                                                                                ---------    ---------
Gross deferred tax assets                                                            84.3        103.7
Valuation allowance - foreign net operating loss carryforwards                      (17.8)       (12.1)
                                                                                ---------    ---------
   Net deferred tax assets                                                      $    66.5    $    91.6
                                                                                ---------    ---------
Deferred tax liabilities:
Property, plant and equipment                                                   $    63.4    $    57.9
Foreign branch activity                                                              20.6         10.1
Goodwill                                                                              8.4          7.2
Deferred state taxes                                                                  6.2          2.7
Other                                                                                26.7         30.1
                                                                                ---------    ---------
   Total deferred tax liabilities                                               $   125.3    $   108.0
                                                                                ---------    ---------
     Net deferred tax liability                                                 $    58.8    $    16.4
                                                                                =========    =========
Net deferred tax liability (asset) included in:
     "Other current assets"                                                     $   (16.6)   $   (14.3)
     "Deferred income taxes"                                                         75.4         30.7
                                                                                ---------    ---------
     Net deferred tax liability                                                 $    58.8    $    16.4
                                                                                =========    =========
</TABLE>
   There currently is no undistributed  foreign income because General Bottlers'
foreign operations have generated pretax losses of $20.4 million,  $21.3 million
and $11.3 million in 1997,  1996 and 1995,  respectively.  At December 31, 1997,
estimated  potential  future tax  benefits  of net  operating  losses were $18.8
million,  for which a valuation  allowance of $17.8  million has been  provided.
This valuation  allowance  reflects the uncertainty of the Company's  ability to
fully utilize these benefits given the limited carryforward periods permitted by
the foreign taxing jurisdictions.  The change in the valuation allowance of $5.7
million during 1997 principally  reflects  allowances provided on foreign losses
incurred during 1997, offset by changes in foreign tax rates.

6.   DEBT

     Debt at December 31 consisted of the following:
<TABLE>
<CAPTION>
(in millions)                                                                                         1997         1996
                                                                                                   ---------    ---------
<S>                                                                                                <C>          <C>
6.25% to 6.90% notes due 2000 and 2005                                                             $   136.5    $   136.5
7.5% notes due 2003                                                                                    125.0        125.0
7.29% and 7.44% notes due 2026 ($100 million and $25 million due 2004 and 2008,
     respectively, at option of note holder)                                                           125.0        125.0
6.5% notes due 2006                                                                                    100.0        100.0
7.625% notes due 2015                                                                                  100.0        100.0
8.25% notes due 2007                                                                                   100.0        100.0
7.5% notes due 2001                                                                                     75.0         75.0
Notes due 2002, effective interest rate 6.2%                                                            50.0           --
8.11% and 8.12% notes due 1997                                                                            --         50.5
Term loan and note due 1998 through 1999, effective interest rates 6.5% to 6.9%                         50.0         95.0
Foreign revolving credit borrowings, effective interest rate 6.3%                                       25.0           --
Various other debt                                                                                       5.1          5.1
                                                                                                   ---------    ---------
Total debt                                                                                             891.6        912.1
Less:  Amount classified as short-term debt                                                            282.5         85.5
       Unamortized discount                                                                              4.4          4.9
                                                                                                   ---------    --------- 
Total long-term debt                                                                               $   604.7    $   821.7
                                                                                                   =========    =========
</TABLE>
     The Company maintains a $200 million  commercial paper program.  There were
no  borrowings  under this  program at either  December  31,  1997 or 1996.  The
Company also has a contractual  revolving  credit  facility  which permits it to
borrow up to $300 million.  The interest rates on the revolving credit facility,
expiring in 2000,  may be floating or fixed,  and are based on domestic rates or
the London Interbank Offered Rate ("LIBOR"), at the option of the Company. There
were no borrowings  under the revolving  credit  facility at either December 31,
1997 or 1996. As such, the entire $300 million of the revolving  credit facility
remained unused and available to back the Company's commercial paper borrowings.
The  weighted-average   borrowings  under  the  revolving  credit  facility  and
commercial  paper  program  during 1997 and 1996 were not  significant  and fees
payable on the unused portion of such commitments were not material.
     General  Bottlers,  in connection  with its acquisition of the franchise in
northwest Russia, including St. Petersburg, entered into a contractual revolving
credit  facility  which  permits it to borrow up to $40  million.  The  facility
expires in 1998, but the Company expects to renew it before it expires. Interest
rates on the  facility  are  floating,  based on LIBOR,  and fees payable on the
unused portion are not  significant.  Borrowing under the facility totaled $25.0
million at December 31, 1997.
     During  December,  1997,  the  Company  repaid a term loan with a principal
amount  of  $30.0  million  scheduled  to  mature  in 2000.  There  were no fees
associated with this redemption.
     During  January,  1998,  the  Company  made a tender  offer for any and all
outstanding  7.625% and 8.25% notes  maturing  June 15,  2015,  and February 15,
2007,  respectively.  Notes with  principal  amounts of $91.0  million and $88.5
million of the 7.625% and the 8.25% notes,  respectively,  were  tendered to and
purchased  by the  Company.  The  Company  also repaid a term loan and note with
principal  amounts of $50.0 million  scheduled to mature in 1998 and 1999, notes
due in 2002 with principal amounts of $50.0 million and industrial revenue bonds
of $5.0 million due 2013. All debt repaid during  January,  1998, was classified
as  short-term  debt at December  31, 1997.  The tender offer  results and other
repayments are discussed further in Note 15 "Subsequent Events".
     The amounts of long-term  debt  maturing in 1999  through  2001 are:  $25.0
million,  $75.5 million and $75.0  million,  respectively.  No long-term debt is
scheduled to mature in 2002.
     The  Company  has  pledged  certain  buildings  as  collateral  for various
long-term loan  agreements.  However,  the net book value of such assets was not
material at December 31, 1997. Certain of the Company's  financing  arrangements
contain a restriction  requiring the  maintenance of a specific  financial ratio
related  to  interest  coverage.  The  Company is in  compliance  with this debt
covenant.

7.   FINANCIAL INSTRUMENTS

     The  Company  has used  financial  derivative  instruments  to  manage  its
interest rate risk.  Interest rate swap  transactions and forward rate contracts
generally  involve the  exchange of fixed and  floating  rate  interest  payment
obligations without the exchange of the underlying notional amounts.
     The Company had entered into certain  interest  rate swap  agreements  with
commercial  and investment  banks in which it paid a floating  interest rate and
received a fixed interest rate.
     The  notional   amounts  related  to  the  Company's   interest  rate  swap
transactions  and  forward  rate  agreements  activity  for  1996  and  1997 are
summarized as follows (in millions):
<TABLE>
<CAPTION>
                                                              Interest Rate Swaps              Forward Rate Agreements
                                                          ----------------------------       ----------------------------
                                                            Pay Fixed     Pay Variable         Pay Fixed     Pay Variable
                                                          ------------    ------------       ------------    ------------
<S>                                                       <C>             <C>                <C>             <C>              
Balance, January 1, 1996                                  $         --    $      165.0       $      165.0    $         --
                                                   
Expired contracts                                                   --          (125.0)            (165.0)             --
                                                          ------------    ------------       ------------    ------------
Balance, December 31, 1996                                          --            40.0                 --              --
                                                   
Expired contracts                                                   --           (40.0)                --              --
                                                          ------------    ------------       ------------    ------------
Balance, December 31, 1997                                $         --    $         --       $         --    $         --
                                                          ============    ============       ============    ============
</TABLE>
     Whitman's  interest  rate and  foreign  currency  hedging  programs  had no
significant impact on the annual  weighted-average  cost of debt in 1997 or 1996
and increased it from 7.9 percent to 8.1 percent in 1995.  Interest  expense was
increased by $1.5 million in 1995, principally as a result of Whitman's interest
rate hedging programs.
     The Company  previously  entered into foreign  currency swap  agreements to
reduce the effect of changes in foreign  exchange rates on its debt  denominated
in foreign currencies. Under the hedge agreements, in January, 1995, the Company
repaid the 138.2 million Swiss franc debt at an effective exchange rate of 2.764
Swiss francs per U.S.  dollar ($50.0  million),  compared to the actual exchange
rate of 1.288 Swiss francs per U.S. dollar ($107.3  million).  Additionally,  in
February,  1995,  the Company repaid the 50 million  Canadian  dollar debt at an
effective  exchange  rate of  1.312  Canadian  dollars  per U.S.  dollar  ($38.1
million),  compared to the actual  exchange rate of 1.403  Canadian  dollars per
U.S. dollar ($35.6 million). Assuming the Company had left the interest payments
payable in foreign  currency (i.e.,  unhedged),  the Company's  interest expense
would have decreased by less than $0.1 million in 1995.
     At December 31, 1997,  the Company had $80.1  million in floating rate debt
exposure.  Substantially  all of the  floating  rate  exposure is related to six
month LIBOR  rates.  If the six month LIBOR rates  increased  by 50 basis points
(0.50 percent), the Company's 1997 interest expense related to the floating rate
debt outstanding during 1997 would have increased by an additional $0.6 million.
     As of the end of each of the last two years,  the  Company  had no deferred
gains or losses related to terminated interest rate swap agreements.
     The fair market value of the  Company's  floating  rate debt as of December
31, 1997 approximated its carrying value. The fixed rate debt of the Company had
a carrying  value of $807.1 million and an estimated fair market value of $847.4
million at December 31,  1997.  The fair market value of the fixed rate debt was
based on  quotes  from  financial  institutions  for  instruments  with  similar
characteristics or upon discounting future cash flows.

8.   PENSION AND OTHER POSTRETIREMENT PLANS

COMPANY-SPONSORED  DEFINED  BENEFIT  PENSION  PLANS.  Substantially  all  of the
Company's U.S. employees are covered under various defined benefit pension plans
sponsored and funded by the Company.  Plans covering salaried  employees provide
pension  benefits  based on years of  service  and  generally  are  limited to a
maximum of 20 percent of the employees' average annual  compensation  during the
five years  preceding  retirement.  Plans covering  hourly  employees  generally
provide  benefits of stated  amounts  for each year of service.  Plan assets are
invested primarily in common stocks, corporate bonds and government securities.
     Net periodic  pension cost for 1997,  1996 and 1995  included the following
components:
<TABLE>
<CAPTION>
(in millions)                                                                           1997         1996         1995
                                                                                      --------     --------     --------
<S>                                                                                   <C>          <C>          <C>
Service cost - benefits earned during period                                          $    3.4     $    3.3     $    2.8
Interest cost on projected benefit obligation                                              6.5          6.1          5.7
Actual return on assets                                                                  (21.8)       (10.2)       (12.4)
Net amortization and deferral                                                             15.3          4.3          6.8
                                                                                      --------     --------     --------
Total net periodic pension cost                                                       $    3.4     $    3.5     $    2.9
                                                                                      ========     ========     ========
</TABLE>
   The  following  table  reconciles  the pension  plans'  funded  status to the
amounts  recognized in the Company's  balance sheets as of December 31, 1997 and
1996:
<TABLE>
<CAPTION>
                                                                           1997                           1996
                                                               -----------------------------  -----------------------------
                                                                Assets Exceed   Accumulated    Assets Exceed   Accumulated
                                                                 Accumulated      Benefits      Accumulated      Benefits
(in millions)                                                      Benefits    Exceed Assets      Benefits    Exceed Assets
                                                               --------------  -------------  --------------  -------------
<S>                                                               <C>            <C>             <C>            <C>
Actuarial present value of benefit obligation
(measured as of September 30):
   Vested benefit obligation                                      $ (77.4)       $  (3.1)        $ (68.2)       $  (1.7)
                                                                  =======        =======         =======        =======
   Accumulated benefit obligation                                 $ (83.2)       $  (3.5)        $ (72.9)       $  (2.7)
                                                                  =======        =======         =======        =======
   Projected benefit obligation                                   $ (93.3)       $  (5.2)        $ (82.2)       $  (4.2)

Plan assets at fair market value (measured as of September 30)      103.0             --            83.7             --
                                                                  -------        -------         -------        -------
Plan assets in excess of (less than) projected benefit obligation     9.7           (5.2)            1.5           (4.2)
Unrecognized net asset at transition to SFAS No. 87                  (0.8)            --            (1.0)            --
Unrecognized prior service cost                                       4.1            0.8             4.3            1.0
Unrecognized net loss (gain)                                        (10.3)           1.2            (0.8)           0.7
Additional liability required to recognize minimum liability           --           (0.5)             --           (0.4)
                                                                  -------        -------         -------        -------
Prepaid (accrued) pension cost recognized on balance sheets       $   2.7        $  (3.7)        $   4.0        $  (2.9)
                                                                  =======        =======         =======        =======
</TABLE>
     Pension costs are funded in amounts not less than minimum  levels  required
by regulation.  The principal economic  assumptions used in the determination of
net periodic pension cost and benefit obligations were as follows:
<TABLE>
<CAPTION>
Net periodic pension cost:                                   1997          1996         1995
                                                             ----          ----         ----
<S>                                                          <C>           <C>          <C>
Discount rates                                               7.5%          7.5%         8.5%
Expected long-term rates of return on assets                 9.5%          9.5%         9.5%
Rates of increase in future compensation levels              5.0%          5.0%         6.0%

</TABLE>
Benefit obligations:                                         1997          1996
                                                             ----          ----
Discount rates                                               7.0%          7.5%
Rates of increase in future compensation levels              4.5%          5.0%

COMPANY-SPONSORED  DEFINED  CONTRIBUTION PLANS.  Substantially all U.S. salaried
employees  and  certain  U.S.   hourly   employees   participate  in  voluntary,
contributory  defined  contribution  plans to which the  Company  makes  partial
matching  contributions.  Company  contributions to these plans amounted to $5.6
million, $5.5 million and $5.2 million in 1997, 1996 and 1995, respectively.

MULTI-EMPLOYER PENSION PLANS. The Company's subsidiaries participate in a number
of multi-employer pension plans which provide benefits to certain union employee
groups of the Company.  Amounts  contributed  to the plans totaled $2.8 million,
$2.5 million and $2.4 million in 1997, 1996 and 1995, respectively.

POST-RETIREMENT BENEFITS OTHER THAN PENSIONS. The Company provides substantially
all former U.S. salaried employees who retired prior to July 1, 1989 and certain
other  employees in the U.S.  with certain life and health care  benefits.  U.S.
salaried employees retiring after July 1, 1989 generally are required to pay the
full cost of these  benefits.  Eligibility  for these  benefits  varies with the
employee's  classification  prior to retirement.  Benefits are provided  through
insurance  contracts or welfare trust funds.  The insurance  plans generally are
financed  by monthly  insurance  premiums  and are based  upon the prior  year's
experience.  Benefits  paid from the  welfare  trust  are  financed  by  monthly
deposits  which  approximate  the amount of current  claims  and  expenses.  The
Company has the right to modify or terminate these benefits. 
     Net periodic cost of post-retirement benefits other than pensions for 1997,
1996  and  1995  amounted  to $0.2  million,  $0.4  million  and  $0.4  million,
respectively.  The Company's  post-retirement  life and health  benefits are not
funded. The unfunded accrued post-retirement  benefits amounted to $15.7 million
at December 31, 1997, and $15.8 million at December 31, 1996.

MULTI-EMPLOYER   POST-RETIREMENT  MEDICAL  AND  LIFE  INSURANCE.  The  Company's
subsidiaries  participate  in a number of  multi-employer  plans  which  provide
health care and survivor  benefits to union employees during their working lives
and after  retirement.  Portions of the benefit  contributions,  which cannot be
disaggregated,  related to post-retirement benefits for plan participants. Total
amounts charged against income and contributed to the plans  (including  benefit
coverage during their working lives) amounted to $4.0 million,  $3.7 million and
$2.0 million in 1997, 1996 and 1995, respectively.

9.   LEASES

     At December 31, 1997, annual minimum rental payments under operating leases
that have initial noncancellable terms in excess of one year were $11.9 million,
$7.9 million, $6.0 million, $2.9 million, $0.5 million and $0.1 million in 1998,
1999,  2000, 2001, 2002 and thereafter,  respectively.  The future payments have
not been reduced by $0.3 million of sublease  rental  receipts  which are due in
the future under noncancellable subleases.
     Total  rent  expense  applicable  to  operating  leases  amounted  to $14.7
million, $14.1 million and $15.1 million in 1997, 1996 and 1995, respectively. A
majority  of  the  Company's   leases  provide  that  the  Company  pays  taxes,
maintenance, insurance and certain other operating expenses.

10.  STOCK OPTIONS AND SHARES RESERVED

     The Company's  Stock  Incentive Plan (the "Plan"),  originally  approved by
shareholders in 1982 and  subsequently  amended from time to time,  provides for
granting  incentive  stock options,  nonqualified  stock options,  related stock
appreciation  rights (SARs),  restricted stock awards, and performance awards or
any combination of the foregoing. Incentive stock options and nonqualified stock
options are exercisable  during a ten-year period  beginning six months to three
years after the date of grant. Stock appreciation  rights have been granted with
respect to certain  nonqualified  and incentive stock options.  All options were
granted at fair market value at the date of grant.

     Changes in options outstanding are summarized as follows:
<TABLE>
<CAPTION>
                                                                             Options Outstanding
                                                  ------------------------------------------------------------------
                                                                            Range of           Weighted-Average
                                                      Options            Exercise Prices        Exercise Price
                                                  ---------------       ----------------       ----------------
<S>                                                 <C>                 <C>                         <C>
Balance, January 1, 1995                             5,704,193          $ 6.94 - $ 17.25            $ 13.22
                                                    ----------          
Granted                                                926,400           18.25 -   19.44              18.25
Exercised or surrendered for SARs                   (1,014,328)           6.94 -   18.25              12.90
Recaptured or terminated                               (14,500)          12.88 -   18.25              15.75
                                                    ----------          
Balance, December 31, 1995                           5,601,765           10.29 -   19.44              14.10
                                                    ----------          
Granted                                              2,408,600           22.66 -   25.31              25.27
Exercised or surrendered for SAR's                  (1,174,244)          10.29 -   18.25              13.36
Recaptured or terminated                               (29,034)          15.69 -   25.31              22.07
                                                    ----------          
Balance, December 31, 1996                           6,807,087           11.23 -   25.31              18.15
                                                    ----------          
Granted                                              2,244,300           23.06 -   27.81              23.13
Exercised or surrendered for SAR's                    (912,426)          11.23 -   25.31              10.80
Recaptured or terminated                              (123,734)          18.25 -   25.31              12.43
                                                    ----------          
Balance, December 31, 1997                           8,015,227           11.23 -   27.81              19.81
                                                    ==========          
</TABLE>
     The number of options exercisable at December 31, 1997 was 4,442,759,  with
a weighted-average  exercise price of $16.76,  compared with options exercisable
of  3,577,553  at December  31,  1996 and  4,009,931  at December  31, 1995 with
weighted-average exercise prices of $13.52 and $13.02, respectively. At December
31, 1997,  there were 5,510,112  shares  available for future grants,  including
5,000,000  shares  provided for by the adoption of the Revised  Stock  Incentive
Plan in November,  1997. The following table  summarizes  information  regarding
stock options outstanding and exercisable at December 31, 1997:
<TABLE>
<CAPTION>
                                          Options Outstanding                                  Options Exercisable
                        -----------------------------------------------------          ---------------------------------
                                       Weighted-Average
     Range of             Options       Remaining Life       Weighted-Average            Options        Weighted-Average
  Exercise Prices       Outstanding       (in years)          Exercise Price           Exercisable       Exercise Price
-----------------       -----------    ----------------      ----------------          -----------      ----------------
<S>                      <C>                  <C>              <C>                      <C>                 <C>
$11.23 - $16.31          2,824,557            4.1              $    13.34               2,824,557           $    13.34
$17.25 - $23.06          2,909,170            8.8                   21.78                 699,406                19.33
$24.13 - $27.81          2,281,500            8.4                   25.32                 918,796                25.31
                         ---------                                                      ---------           
Total Options            8,015,227            7.0                   19.81               4,442,759                16.76
                         =========                                                      =========           
</TABLE>

     SFAS No. 123,  "Accounting for Stock-Based  Compensation"  requires,  among
other items,  the Company to disclose either in the  Consolidated  Statements of
Income or in the Notes to the Consolidated  Financial  Statements an estimate of
the cost of stock  options  granted to  employees.  The  Company  has elected to
continue to account for stock options granted to employees under APB Opinion No.
25. However,  using the Black-Scholes model and the following  assumptions,  the
estimated  fair value of an option at the dates of grant in 1997,  1996 and 1995
was $5.62, $5.72 and $4.78, respectively.
<TABLE>
<CAPTION>
                                                     1997                1996                1995
                                                    ------              ------              ------
<S>                                                 <C>                 <C>                 <C>
Risk-free interest rate                              6.2%                6.5%                6.9%
Expected dividend yield                              1.7%                1.9%                1.9%
Expected volatility                                 16.0%               16.7%               17.7%
Estimated lives of options (in years)                5.0                 5.0                 5.0
</TABLE>

Based upon the above assumptions,  the Company's pro forma net income (loss) and
income (loss) per share would have been:
<TABLE>
<CAPTION>
                                                                      1997         1996         1995
                                                                    -------      -------      -------
<S>                                                                 <C>          <C>          <C>
Pro forma net income (in millions):
  Income from continuing operations                                 $  13.5      $  46.5      $  46.5
  Income (loss) from discontinued operations                          (14.5)        90.1         86.4
                                                                    -------      -------      -------
  Net income (loss)                                                 $  (1.0)     $ 136.6      $ 132.9
                                                                    =======      =======      =======
Pro forma basic income (loss) per share:
  Continuing operations                                             $  0.13      $  0.44      $  0.44
  Discontinued operations                                             (0.14)        0.86         0.83
                                                                    -------      -------      -------
  Net income (loss)                                                 $ (0.01)     $  1.30      $  1.27
                                                                    =======      =======      =======
Pro forma diluted income (loss) per share:
  Continuing operations                                             $  0.13      $  0.44      $  0.44
  Discontinued operations                                             (0.14)        0.85         0.81
                                                                    -------      -------      -------
  Net income (loss)                                                 $ (0.01)     $  1.29      $  1.25
                                                                    =======      =======      =======
</TABLE>
     Options  granted in 1997, 1996 and 1995 vest equally each year over a three
year period.  As a result,  the estimated  costs  indicated above reflect only a
partial  vesting of such  options  and do not  consider  the pro forma costs for
options  granted  before 1995. If full vesting were  assumed,  the estimated pro
forma  compensation  costs for each year would have been higher  than  indicated
above.  See  further  discussion  of options  forfeited  by  Hussmann  and Midas
employees in connection with the spin-offs in Note 15 - "Subsequent Events".
     The Company granted 233,600,  271,700 and 98,900 restricted shares of stock
at a weighted-average  fair value (at the dates of grant) of $23.06,  $25.25 and
$18.18 in 1997, 1996 and 1995, respectively,  to key members of management under
the Plan. The Company recognized  compensation expense in continuing  operations
of $2.8  million,  $1.7  million  and  $1.5  million  in 1997,  1996  and  1995,
respectively,  relating  to  these  grants.  Compensation  expense  recorded  in
discontinued  operations  related  to these  grants  was $2.7  million  and $1.2
million in 1997 and 1996, respectively. No compensation expense was allocated to
discontinued  operations  for these grants prior to 1996.  At December 31, 1997,
there were 353,583 restricted shares of stock outstanding under the Plan.

11.  SHAREHOLDER RIGHTS PLAN AND SECOND PREFERRED STOCK

     In 1989,  the Company  adopted a  Shareholder  Rights  Plan and  declared a
dividend of one preferred share purchase right (a "Right") for each  outstanding
share of common stock,  without par value,  of the Company.  Each Right entitles
the registered  holder to purchase from the Company one one-hundredth of a share
of Junior Participating Second Preferred Stock (Series 1), without par value, of
the Company at a price of $120 per one  one-hundredth  of a share of such Second
Preferred Stock,  subject to adjustment.  The Rights will become  exercisable if
someone buys 15 percent or more of the Company's  common stock. In addition,  if
someone buys 15 percent or more of the Company's  common stock,  each right will
entitle its holder (other than that buyer) to purchase a number of shares of the
Company's  common stock having a market value of twice the Right's $120 exercise
price.  If the  Company is  acquired  in a merger,  each Right will  entitle its
holder to purchase a number of the  acquiring  company's  common shares having a
market value at the time of twice the Right's exercise price.
     Prior to the acquisition of 15 percent or more of the Company's  stock, the
Rights can be redeemed  by the Board of  Directors  for one cent per Right.  The
Company's  Board of Directors  also is  authorized to reduce the threshold to 10
percent or increase  it to not more than 20  percent.  The Rights will expire on
January 30, 1999.  The Rights do not have voting or dividend  rights,  and until
they become  exercisable,  have no dilutive effect on the per-share  earnings of
the Company.
     The Company has 10 million  authorized shares of Second Preferred Stock. In
January, 1989, the Company's Board of Directors designated 2.5 million shares of
the  Second  Preferred  Stock as Junior  Participating  Second  Preferred  Stock
(Series 1) in conjunction  with the Shareholder  Rights Plan. There is no Second
Preferred Stock issued or outstanding.

12.  GENERAL BOTTLERS NON-VOTING PREFERRED STOCK

     In December, 1997, Whitman issued 794,115 shares of its common stock valued
at $20.4  million to an affiliate of PepsiCo,  Inc. in exchange for 2,025 shares
of non-voting preferred stock of General Bottlers (including accrued dividends).
The non-voting  preferred  stock held by PepsiCo,  Inc. had been classified as a
component of minority interest.

13.  SUPPLEMENTAL CASH FLOW INFORMATION

     Net cash provided by continuing  operations reflects cash payments and cash
receipts as follows:

(in millions)                             1997         1996         1995
                                       --------     --------     --------
Interest paid                          $   68.8     $   67.0     $   74.8
Interest received                           3.3          2.8          1.1
Income taxes paid                          53.8         68.9         62.1
Income tax refunds                         11.2          5.7         25.4

     The Company also received interest from Hussmann and Midas related to their
intercompany account balances. Net interest received from Hussmann and Midas was
$23.1  million,  $23.7  million  and  $21.8  million  in 1997,  1996  and  1995,
respectively.
     On December  31, 1996,  the Company  acquired  the St.  Petersburg,  Russia
franchise  from  PepsiCo.  Due to the time  lag in  financial  reporting  by the
Company's foreign operations, this acquisition was reported in the first quarter
of 1997.  The total cost of this  acquisition  was $20.2  million (fair value of
assets  acquired  of  $23.5  million,  net  of  assumed  liabilities,  excluding
long-term debt, of $3.3 million), which was net of acquired cash of $2.3 million
and included  $15.7  million of long-term  debt  assumed.  The  acquisition  was
accounted for as a purchase,  and the operating  results include the acquisition
from the date of purchase.  There were no other significant acquisitions in 1996
or 1997. The Company  acquired a Pepsi-Cola  franchise in Cedar Rapids,  Iowa in
1995,  at a cost of $52.7  million  (fair  value  of  assets  acquired  of $54.1
million,  net of assumed  liabilities  of $1.4  million).  The  acquisition  was
accounted for as a purchase,  and the operating  results include the acquisition
from the date of purchase. The effect of these acquisitions,  had they been made
as of January 1, 1995, would not have been significant to the operating  results
of the Company.
     Common  stock  issuances  for  other  acquisitions  in 1995 and 1996 in the
Consolidated  Statements of  Shareholders'  Equity were related to  discontinued
operations.

14.  ENVIRONMENTAL AND OTHER CONTINGENCIES

     The  Company  is  subject  to  certain  indemnification  obligations  under
agreements  with  previously  sold  subsidiaries  for  potential   environmental
liabilities.  There is significant  uncertainty in assessing the Company's share
of the potential liability for such claims. The assessment and determination for
cleanup at the various sites involved is inherently speculative during the early
stages,  and the  Company's  share of such costs is subject to various  factors,
including possible insurance  recoveries and the allocation of liabilities among
many other potentially responsible and financially viable parties.
     Using the latest  evaluations from outside  advisors and  consultants,  the
Company believes that its potential  future  environmental  liabilities,  before
possible  insurance  recoveries,  range  from $25  million  to $40  million.  At
December  31,  1997,  the  Company  had $30.1  million  accrued  to cover  these
potential  liabilities.  During 1997, the Company  recorded  recoveries of $14.1
million from insurance  companies and other responsible parties related to these
environmental  liabilities,  a  portion  of which  will be  received  in  future
periods. Such recoveries were credited to the accruals for related liabilities.
     These  estimated  liabilities  include  expenses  for  the  remediation  of
identified  sites,  payments to third parties for claims and  expenses,  and the
expenses of on-going  evaluation  and  litigation.  The estimates are based upon
current   technology  and   remediation   techniques,   and  do  not  take  into
consideration any inflationary trends upon such claims or expenses,  nor do they
reflect the possible benefits of continuing improvements in remediation methods.
The accruals also do not provide for any claims for environmental liabilities or
other potential issues which may be filed against the Company in the future.
     The Company also has other  contingent  liabilities  from  various  pending
claims and litigation on a number of matters,  for which the ultimate  liability
for each claim, if any, cannot be determined. In the opinion of management,  and
based upon information  currently  available,  the ultimate  resolution of these
claims  and  litigation,   including  potential  environmental   exposures,  and
considering  amounts  already  accrued,  will not have a material  effect on the
Company's  financial  condition or the results of operations.  While  additional
claims and  liabilities  may  develop  and may result in  additional  charges to
income,  principally  through  discontinued  operations,  the  Company  does not
believe  that such  charges,  if any,  would  have a  material  effect  upon the
Company's financial condition or the results of operations.

15.  SUBSEQUENT EVENTS (UNAUDITED)

     On December 17, 1997,  the Board of Directors  authorized  the spin-offs of
Hussmann and Midas to Whitman  shareholders  on January 30,  1998.  Prior to the
spin-offs,  Hussmann and Midas paid Whitman $240.0  million and $194.3  million,
respectively,  to settle intercompany indebtedness and to pay special dividends.
Prior to these payments, Midas' foreign operations paid $15.7 million to Whitman
Netherlands B.V. during 1998 as a special dividend. Whitman Netherlands B.V. was
contributed  to Hussmann  prior to the  spin-offs and the amounts paid by Midas'
foreign  operations to Whitman  Netherlands  B.V. were considered in determining
the  amount  to be  received  from  Hussmann.  The  spin-offs  will  result in a
reduction of shareholders' equity of approximately $233.3 million.
     In  anticipation  of the funds to be  received  from  Hussmann  and  Midas,
Whitman  made a  tender  offer  on  January  13,  1998,  for  any and all of the
outstanding  7.625% and 8.25% notes  maturing  June 15,  2015,  and February 15,
2007,  respectively.  On January 22, 1998,  Whitman  terminated  its debt tender
offer. In connection with the tender offer, Whitman repurchased 7.625% and 8.25%
notes with principal amounts of $91.0 million $88.5 million,  respectively.  The
Company paid total premiums in connection with the tender offer of $26.4 million
and the remaining  unamortized  discount and issue costs related to  repurchased
notes were $2.1  million.  The  Company  also  repaid a term loan and notes with
principal  amounts of $50.0 million  scheduled to mature in 1998 and 1999, notes
due in 2002 with principal amounts of $50.0 million and industrial revenue bonds
of $5.0  million  due 2013.  Costs  associated  with  these  repayments  and the
remaining  unamortized issue costs were not significant.  The Company expects to
record an  extraordinary  charge of approximately  $18 million  after-tax in the
first quarter of 1998 related to these early extinguishments of debt.
     In January,  1998, the Company issued 92,400 options to certain Whitman and
General  Bottlers  employees  to  purchase  Whitman  common  stock at a price of
$25.03.  The Black Scholes  valuation for these options was $5.64.  In addition,
the Company  issued  319,700  options to employees  of Hussmann and Midas.  As a
result of the  spin-offs,  options  to  purchase  Whitman  common  stock held by
Hussmann and Midas  employees were forfeited and new options to purchase  shares
of the separate  companies were issued to employees of each respective  company.
The total number of options  forfeited,  including  options  granted in January,
1998,  were  3,041,268,  of which  889,793 were  exercisable.  In addition,  the
remaining  option  agreements  were  modified to adjust the number of shares and
relevant  exercise  prices  pursuant to an IRS  formula to  equalize  the option
values before and after the  spin-offs.  Subsequent to the spin-offs in January,
1998, the Company issued 600,000  options to purchase  Whitman common stock at a
price of $16.13 to the senior management of General Bottlers.  The Black Scholes
value for these options was $4.59.  The following table  summarizes  information
regarding stock options outstanding and exercisable as of January 30, 1998:
<TABLE>
<CAPTION>
                                          Options Outstanding                                  Options Exercisable
                        -----------------------------------------------------          ---------------------------------
                                       Weighted-Average
     Range of             Options       Remaining Life       Weighted-Average            Options        Weighted-Average
  Exercise Prices       Outstanding       (in years)          Exercise Price           Exercisable       Exercise Price
-----------------       -----------    ----------------      ----------------          -----------      ----------------
<S>                      <C>                  <C>                  <C>                  <C>                   <C>
$7.04 - $10.23           2,969,490            4.3                  $ 8.38               2,969,492             $ 8.38
$10.82 - $14.46          2,585,583            8.8                   13.60                 929,620              12.59
$15.29 - $17.44          2,690,001            8.8                   15.93               1,035,502              15.87
                         ---------                                                      ---------             
Total Options            8,246,074            7.2                   12.48               4,934,614              10.74
                         =========                                                      =========             
</TABLE>
     Holders of restricted  shares of Whitman  common stock  received  shares of
Hussmann and Midas in the spin-offs,  free of  restrictions.  A total of 132,707
Whitman restricted shares were forfeited by Hussmann and Midas executives, which
were  subsequently  replaced by restricted  shares of  equivalent  value in each
respective company.
<PAGE>
16.  SEGMENT REPORTING

     Selected financial  information  related to the Company's business segments
is shown below:
<TABLE>
<CAPTION>
                                                                         Sales                        Operating income
                                                            ------------------------------    --------------------------------
(in millions)                                                 1997       1996       1995        1997        1996        1995
                                                            --------   --------   --------    --------    --------    --------
<S>                                                         <C>        <C>        <C>         <C>         <C>         <C>
Domestic                                                    $1,464.0   $1,451.1   $1,413.9    $  200.3    $  224.4    $  209.0
Foreign                                                         93.5       50.3       34.8       (18.7)      (12.1)      (11.3)
                                                            --------   --------   --------    --------    --------    --------
 Total before corporate administrative expenses             $1,557.5   $1,501.4   $1,448.7       181.6       212.3       197.7
                                                            ========   ========   ========    --------    --------    --------
Corporate administrative expenses                                                                (51.4)      (17.5)      (16.6)
 Total operating income                                                                          130.2       194.8       181.1
Interest expense, net                                                                            (42.3)      (41.5)      (47.6)
Other expense, net                                                                   `           (18.0)      (25.6)      (15.3)
                                                                                              --------    --------    --------
Pretax income                                                                                 $   69.9    $  127.7    $  118.2
                                                                                              ========    ========    ========
</TABLE>
<TABLE>
<CAPTION>
                                                                 Depreciation and
                               Identifiable Assets                 Amortization                  Capital Investments
                         ------------------------------   ------------------------------   ------------------------------
(in millions)              1997       1996       1995       1997       1996       1995       1997       1996       1995
                         --------   --------   --------   --------   --------   --------   --------   --------   --------
<S>                      <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>  
Domestic                 $1,005.0   $  979.7   $  980.9   $   64.5   $   62.5   $   57.3   $   71.5   $   77.1   $   84.3
Foreign                     127.1       97.7       74.8        5.9        4.0        2.7       11.8        9.8       26.1
                         --------   --------   --------   --------   --------   --------   --------   --------   --------
Total General Bottlers    1,132.1    1,077.4    1,055.7       70.4       66.5       60.0       83.3       86.9      110.4
Other                        37.8       40.9       50.0        3.4        8.7       10.6        0.1        0.3        0.7
                         --------   --------   --------   --------   --------   --------   --------   --------   --------
  Total before corporate
  assets                  1,169.9    1,118.3    1,105.7   $   73.8   $   75.2   $   70.6   $   83.4   $   87.2   $  111.1
                                                          ========   ========   ========   ========   ========   ========
Corporate assets            196.1      186.9      265.4
Net assets of companies
  held for disposition      663.7      775.4      679.4
                         --------   --------   --------
Total assets             $2,029.7   $2,080.6   $2,050.5
                         ========   ========   ========
</TABLE>
<PAGE>
     Operating income is exclusive of net interest expense, equity in net income
or losses of  affiliates,  other  miscellaneous  income and expense  items,  and
income taxes. During the third and fourth quarters of 1997, the Company recorded
special  charges  of $49.3  million  (see Note 3).  These  charges  reduced  the
reported  operating  income for the domestic and foreign  operations  of General
Bottlers by $11.1 million and $3.7 million,  respectively, in 1997. In addition,
corporate  administrative  expenses in 1997  included  special  charges of $34.5
million.   Other  expense,  net,  in  1996  included  an  $8.7  million  charge,
principally  related to asset  write-downs at General Bottlers' joint venture in
Poland.  Foreign  currency gains or losses were not  significant.  There were no
sales between  geographical  areas or export sales. Sales to any single customer
and sales to domestic or foreign  governments  were  individually  less than ten
percent of consolidated sales and revenues.
     Equity in net  losses and net assets of the  Company's  foreign  operations
amounted  to $20.4  million  and $67.9  million,  respectively,  in 1997,  $21.3
million and $74.0 million in 1996, and $11.3 million and $68.3 million in 1995.
     Corporate assets are principally cash or cash equivalents,  investments and
miscellaneous  other assets,  including  $92.1 million,  $94.3 million and $96.8
million  of real  estate  investments  at  December  31,  1997,  1996 and  1995,
respectively.
<PAGE>
17.  SELECTED QUARTERLY FINANCIAL DATA
     (unaudited and in millions, except for earnings per share)
<TABLE>
<CAPTION>
                                                     First          Second          Third        Fourth         Full
                                                    Quarter         Quarter        Quarter       Quarter        Year
                                                   ---------      ---------       ---------     ---------    ---------  
<S>                                                <C>            <C>             <C>           <C>          <C>
1997:
----
Sales                                              $   333.5      $   392.5       $   452.9     $   378.6    $ 1,557.5
                                                   ---------      ---------       ---------     ---------    ---------
Gross profit                                       $   126.7      $   148.9       $   169.8     $   139.5    $   584.9
                                                   ---------      ---------       ---------     ---------    ---------
Income (loss) from continuing operations           $     5.8      $    11.2       $    14.1     $   (15.3)   $    15.8
Income (loss) from discontinued operations               9.7           22.5           (47.9)          4.0        (11.7)
                                                   ---------      ---------       ---------     ---------    ---------
Net income (loss)                                  $    15.5      $    33.7       $   (33.8)    $   (11.3)   $     4.1
                                                   =========      =========       =========     =========    =========
AVERAGE SHARES:
   Basic EPS - weighted-average common shares          102.2          101.6           101.5         101.2        101.6
   Incremental effect of stock options                   1.1            1.1             1.3            --          1.3
                                                   ---------      ---------       ---------     ---------    ---------
   Diluted EPS - adjusted weighted-average
     common shares                                     103.3          102.7           102.8         101.2        102.9
                                                   =========      =========       =========     =========    =========
BASIC EARNINGS (LOSS) PER SHARE:
   Continuing operations                           $   0.06       $    0.11       $    0.14     $   (0.15)   $    0.16
   Discontinued operations                             0.09            0.22           (0.47)         0.04        (0.12)
                                                   --------       ---------       ---------     ---------    ---------
   Net income (loss)                               $   0.15       $    0.33       $   (0.33)    $   (0.11)   $    0.04
                                                   ========       =========       =========     =========    =========
DILUTED EARNINGS (LOSS) PER SHARE:
   Continuing operations                           $   0.06       $    0.11       $    0.14     $   (0.15)   $    0.15
   Discontinued operations                             0.09            0.22           (0.47)         0.04        (0.11)
                                                   --------       ---------       ---------     ---------    ---------
   Net income (loss)                               $   0.15       $    0.33       $   (0.33)    $   (0.11)   $    0.04
                                                   ========       =========       =========     =========    =========
<PAGE>
1996:
----
Sales                                              $   332.7      $   384.5       $   426.5     $   357.7    $ 1,501.4
                                                   ---------      ---------       ---------     ---------    ---------
Gross profit                                       $   124.9      $   148.4       $   162.0     $   141.7    $   577.0
                                                   ---------      ---------       ---------     ---------    ---------
Income from continuing operations                  $     7.2      $    15.0       $    22.2     $     3.4    $    47.8
Income from discontinued operations                      8.8           26.7            30.7          25.4         91.6
                                                   ---------      ---------       ---------     ---------    ---------
Net income                                         $    16.0      $    41.7       $    52.9     $    28.8    $   139.4
                                                   =========      =========       =========     =========    =========
AVERAGE SHARES:
   Basic EPS - weighted-average common shares          105.5          105.6           104.6         103.5        104.8
   Incremental effect of stock options                   1.3            1.3             1.1           1.1          1.2
                                                   ---------      ---------       ---------     ---------    ---------
   Diluted EPS - adjusted weighted-average
     common shares                                     106.8          106.9           105.7         104.6        106.0
                                                   =========      =========       =========     =========    =========
BASIC EARNINGS PER SHARE:
   Continuing operations                           $   0.07       $    0.14       $    0.21     $    0.03    $    0.46
   Discontinued operations                             0.08            0.25            0.30          0.25         0.87
                                                   --------       ---------       ---------     ---------    ---------
   Net income                                      $   0.15       $    0.39       $    0.51     $    0.28    $    1.33
                                                   ========       =========       =========     =========    =========
DILUTED EARNINGS PER SHARE:
   Continuing operations                           $   0.07       $    0.14       $    0.21     $    0.03    $    0.45
   Discontinued operations                             0.08            0.25            0.29          0.25         0.87
                                                   --------       ---------       ---------     ---------    ---------
   Net income                                      $   0.15       $    0.39       $    0.50     $    0.28    $    1.32
                                                   ========       =========       =========     =========    =========
</TABLE>
The  earnings  per share may not be  additive  due to changes in average  shares
outstanding during the periods or rounding.
<PAGE>
     In the third and fourth  quarters  of 1997,  the Company  recorded  special
charges  related  to the  spin-offs,  the  restructuring  of  General  Bottlers'
organization and the elimination of a significant  portion of Whitman  Corporate
management  and staff  (see  Note 3). In  addition,  special  charges  were also
recorded  by  Hussmann  and  Midas,  which  were  reclassified  to  discontinued
operations  in  December,  1997 (see Note 2).  The  effects  on net  income  and
earnings per share (after  income  taxes and  minority  interest)  for the third
quarter, fourth quarter and full year of 1997 were as follows:
<TABLE>
<CAPTION>
                                                                   Third          Fourth           Full
                                                                  Quarter         Quarter          Year
                                                                  -------        --------        -------
<S>                                                               <C>             <C>            <C>
SPECIAL CHARGES AFTER TAXES AND MINORITY INTEREST:
(in millions)
     Continuing operations                                        $  (7.5)        $ (24.1)       $ (31.6)
     Discontinued operations                                        (76.0)          (17.4)         (93.4)
                                                                  -------         -------        -------
     Net income                                                   $ (83.5)        $ (41.5)       $(125.0)
                                                                  =======         =======        =======
BASIC EARNINGS PER SHARE:
     Continuing operations                                        $ (0.07)        $ (0.24)       $ (0.31)
     Discontinued operations                                        (0.75)          (0.17)         (0.92)
                                                                  -------         -------        -------
     Net income                                                   $ (0.82)        $ (0.41)       $ (1.23)
                                                                  =======         =======        =======
DILUTED EARNINGS PER SHARE:
     Continuing operations                                        $ (0.07)        $ (0.24)       $ (0.31)
     Discontinued operations                                        (0.74)          (0.17)         (0.91)
                                                                  -------         -------        -------
     Net income                                                   $ (0.81)        $ (0.41)       $ (1.22)
                                                                  =======         =======        =======
</TABLE>
     In the fourth quarter of 1996, the Company  recorded an after-tax charge of
$8.7 million ($7.0 million after  minority  interest) in "other  expense,  net",
principally  related to asset  write-downs at General Bottlers' joint venture in
Poland. The charge reduced basic and diluted earnings per share by $0.07 for the
fourth quarter and year ended December 31, 1996.
     Due to the loss from  continuing  operations in the fourth quarter of 1997,
no potential  common shares were included in the  computation of average diluted
shares.  The  effect  of  potential  common  shares,   assuming  they  were  not
anti-dilutive, would have resulted in average diluted shares of 102.6 million.
     There were no adjustments to the income (loss) amounts,  shown in the table
in Note 17 in calculating  the numerator for the basic and diluted  earnings per
share.
<PAGE>
Whitman Corporation
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

For the years ended December 31                         1997           1996           1995           1994           1993
                                                      --------       --------       --------       --------       --------
(in millions, except for earnings per share)
<S>                                                   <C>            <C>            <C>            <C>            <C>
OPERATING RESULTS:
Sales:
        Domestic                                      $1,464.0       $1,451.1       $1,413.9       $1,255.4       $1,179.6
        Foreign                                           93.5           50.3           34.8            0.7             --
                                                      --------       --------       --------       --------       --------
          Total                                       $1,557.5       $1,501.4       $1,448.7       $1,256.1       $1,179.6
                                                      ========       ========       ========       ========       ========
Operating income:
        Domestic                                      $  200.3 (A)   $  224.4       $  209.0       $  187.7       $  170.5
        Foreign                                          (18.7)(A)      (12.1)         (11.3)          (2.2)            --
                                                      --------       --------       --------       --------       --------
          Total before corporate administrative
            expenses                                     181.6          212.3          197.7          185.5          170.5
          Corporate administrative expenses               51.4 (A)       17.5           16.6           16.4           15.9
                                                      --------       --------       --------       --------       --------
          Total operating income                         130.2          194.8          181.1          169.1          154.6
Interest expense, net                                    (42.3)         (41.5)         (47.6)         (45.4)         (69.0)
Other income (expense), net                              (18.0)         (25.6)(B)      (15.3)         (43.4)(C)       (4.5)
                                                      --------       --------       --------       --------       --------
          Income before income taxes                      69.9          127.7          118.2           80.3           81.1
Income tax provisions                                     37.9           61.1           52.8           35.6           36.3
Minority interest                                         16.2           18.8 (B)       18.6           18.2           15.1
                                                      --------       --------       --------       --------       --------
Income from continuing operations                         15.8           47.8           46.8           26.5           29.7
Income (loss) from discontinued operations               (11.7)(D)       91.6           86.7           76.7           62.1
Extraordinary loss on early debt retirement                 --             --             --             --           (4.2)
Cumulative effect of accounting change                      --             --             --             --           (9.4)
                                                      --------       --------       --------       --------       --------
Net income                                            $    4.1       $  139.4       $  133.5       $  103.2       $   78.2
                                                      ========       ========       ========       ========       ========

Cash dividends per common share                       $   0.45       $   0.41       $   0.37       $   0.33       $   0.29
                                                      ========       ========       ========       ========       ========

AVERAGE SHARES:
Basic EPS - weighted-average common shares               101.6          104.8          104.9          105.5          107.1
Incremental effect of stock options                        1.3            1.2            1.1            0.7            0.5
                                                      --------       --------       --------       --------       --------
Diluted EPS - adjusted weighted-average
     common shares                                       102.9          106.0          106.0          106.2          107.6
                                                      ========       ========       ========       ========       ========
BASIC EARNINGS (LOSS) PER SHARE (E):
Continuing operations                                 $   0.16       $   0.46       $   0.44       $   0.25       $   0.28
Discontinued operations                                  (0.12)          0.87           0.83           0.73           0.58
Extraordinary loss on early debt retirement                 --             --             --             --          (0.04)
Cumulative effect of accounting change                      --             --             --             --          (0.09)
                                                      --------       --------       --------       --------       --------
     Net income                                       $   0.04       $   1.33       $   1.27       $   0.98       $   0.73
                                                      ========       ========       ========       ========       ========
DILUTED EARNINGS (LOSS) PER SHARE (E):
Continuing operations                                 $   0.15       $   0.45       $   0.44       $   0.25       $   0.28
Discontinued operations                                  (0.11)          0.87           0.82           0.72           0.58
Extraordinary loss on early debt retirement                 --             --             --             --          (0.04)
Cumulative effect of accounting change                      --             --             --             --          (0.09)
                                                      --------       --------       --------       --------       --------
     Net income                                       $   0.04       $   1.32       $   1.26       $   0.97       $   0.73
                                                      ========       ========       ========       ========       ========
<PAGE>
OTHER STATISTICS:
Total assets                                          $2,029.7       $2,080.6       $2,050.5       $1,853.8       $1,817.4
Long-term debt                                        $  604.7       $  821.7       $  810.3       $  704.0       $  731.3
Capital investments                                   $   83.4       $   87.2       $  111.1       $   66.0       $   45.1
Depreciation and amortization                         $   73.8       $   75.2       $   70.6       $   64.3       $   63.5
Number of employees at December 31                       6,381          5,863          5,739          5,044          4,671
</TABLE>

(A)     In 1997, the Company  recorded  special charges of $49.3 million related
        to the spin-offs,  the restructuring of General  Bottlers'  organization
        and the  elimination of a significant  portion of the Whitman  Corporate
        management  and staff  (see Note 3).  These  charges  reduced  operating
        income for domestic and foreign  operations of General Bottlers by $11.1
        million  and  $3.7  million,   respectively.   In  addition,   corporate
        administrative  expenses  in 1997  included  special  charges  of  $34.5
        million. The full year impact of these charges is disclosed in Note 17.
(B)     Includes an $8.7 million charge,  principally  for asset  write-downs at
        General  Bottlers' joint venture in Poland.  The charge reduced minority
        interest by $1.7 million.
(C)     Includes a  $24.2  million  unrealized  loss on investment in Northfield
        Laboratories Inc.
(D)     In 1997,  Hussmann and Midas,  which were  reclassified  to discontinued
        operations in December, 1997, recorded special charges with an after-tax
        cost of $93.4 million (see Notes 2 and 17).
(E)     There were no  adjustments  to the income (loss)  amounts,  shown in the
        operating  results  section of this table,  in calculating the numerator
        for the basic and diluted earnings per share.
<PAGE>
                      WHITMAN CORPORATION AND SUBSIDIARIES



                             ----------------------

                                    EXHIBITS


                   FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K

                       FISCAL YEAR ENDED DECEMBER 31, 1997
<PAGE>


                                  EXHIBIT INDEX

Exhibit
  No.         Description of Exhibit
-------       ----------------------

(3)a#         Certificate of Incorporation as Restated April 30, 1987, and
              subsequently amended through June 24, 1992.
(3)b+         By-Laws, as amended September 20, 1996.
(4)#          Indenture dated as of January 15, 1993, between Whitman 
              Corporation and The First National Bank of Chicago, Trustee.  The 
              Registrant will furnish to the Securities and Exchange Commission,
              upon request, copies of the forms of the debt securities issued 
              from time to time pursuant to the Indenture dated as of 
              January 15, 1993.
(10)a#        **1982 Stock Option, Restricted Stock Award and Performance Award 
                Plan (as amended through June 16, 1989).
(10)b#        **Amendment No. 2 to 1982 Stock Option, Restricted Stock Award and
                Performance Award Plan made as of September 1, 1992.
(10)c#        **Form of Nonqualified Stock Option Agreement.
(10)d#        **Amendment to 1982 Stock Option, Restricted Stock Award and 
                Performance Award Plan made as of February 19, 1993.
(10)e@        **Form of Change in Control Agreement dated November 17, 1995.
(10)g#        **Management Incentive Compensation Plan.
(10)h#        **Long Term Performance Compensation Program.
(10)i         **Whitman Corporation Executive Retirement Plan, as Amended and 
                Restated Effective January 1, 1998.
(10)j         **Pepsi-Cola General Bottlers, Inc. Executive Retirement Plan, as
                Amended and Restated Effective January 1, 1998.
(10)k#        **Deferred Compensation Plan for Directors, as Amended November 
                18, 1988.
(10)l+        **Amendment to Stock Incentive Plan dated September 20, 1996.
(10)m*        **Form of Restricted Stock Award Agreement.
(10)n         **Revised Stock Incentive Plan (adopted November 21, 1997).
(12)          Statement of Calculation of Ratio of Earnings to Fixed Charges.
(21)          Subsidiaries of the Registrant.
(23)          Consent of Independent Auditors.
(24)          Powers of Attorney.
(27)          Financial Data Schedule.

Exhibit Reference Explanations
**      Exhibit constitutes a management contract or compensatory plan, contract
        or arrangement  described under Item 601(b)  (10)(iii) (A) of Regulation
        S-K.
#       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the year ended December 31, 1992 under the indicated Exhibit number.
*       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the year ended December 31, 1993 under the indicated Exhibit number.
&       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the year ended December 31, 1994 under the indicated Exhibit number.
@       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the year ended December 31, 1995 under the indicated Exhibit number.
+       Incorporated by reference to the  Registrant's  Quarterly Report on Form
        10-Q for the  quarter  ended  September  30,  1996  under the  indicated
        Exhibit number.